top of page
Open Site Navigation

How to Prove Your Startup’s Growth Potential

Fundraising is one of the toughest tasks you’ll take on as a startup founder and entrepreneur. One way to make it easier is to line up the key components you need to tell a good story about your company’s growth. Growth metrics are key to a successful pitch and story.


Once you’ve connected with potential investors and piqued their interest, the next step is sharing specific data about your company. In addition to financials, investors want to see metrics that demonstrate your company is growing and on a path to profitability.


Investors will ask questions about the strength of your customer base and growth, how much churn your company is experiencing, your customer acquisition cost (CAC) ratio and customer lifetime value (CLTV), and if you are approaching product/market fit.

RELATED: How to Calculate CLTV to CAC Ratio for Your SaaS Business


The table below summarizes key tech startup growth metrics and how different investors view them.

Traditional Debt Investors

Revenue-Based Financing Lenders

Equity Investors

Customers

​A strong and diversified customer base is important. Need to see consistent payment from customers

Require more than 5 customers with growth year-over-year

Customer growth is critical, since product-market fit is a major stepping stone equity investors want to see

Churn

Not applicable

Less than 20% for sales to large enterprises, and 20-40% for sales to SMBs

Less than 20% for sales to large enterprises, and 20-40% for sales to SMBs

CAC Ratio

Not applicable

​Depends on the LTV of your customers

Love to see CAC of 1 or better

Customer Lifetime Value

Not applicable

Higher than the cost to acquire

Depends on the investment horizon of the investor

Product Market Fit

Not applicable

Need to see sustainability and adoption of product in the specific markets

Large definable market and clear differentiated space is required

 
The 8 SaaS Metrics That Matter