Startup Metrics & KPIs | Top 10 Metrics Used by VCs

We review 10 of the most important startup metrics used by venture capitalists and founders in Silicon Valley to track the performance of early-stage tech businesses.

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While there are unlimited metrics that startups can track, many of the key dynamics of their businesses can be measured with a handful of KPIs - that's what we focus on in this video.

We review ten of the most important metrics that tech startups should be measuring as they scale.

1. GMV (marketplaces)
2. Bookings, Revenue, Recurring Rev
3. Growth (YoY, MoM)
4. Gross Profit
5. LTV vs. CAC Ratio
6. Customer Retention / Churn Metrics
7. Recurring vs. Total Revenue
8. Active Customers / Users
9. Paid vs. Blended CAC
10. Burn rate & runway

These 10 metrics will tell us (founders, employees, venture capitalists) about a business's overall scale, the profitability of its products and customers, growth and trajectory, marketing efficiency, and fundraising needs.

I could have made 10 different videos on each subject but I condensed them into one super-video!

SECTIONS:

0:26 gross merchandise value (GMV) - particularly important for marketplaces
1:56 bookings vs. revenue, and deferred revenue (unearned revenue)
3:35 recurring vs. total revenue, MRR & ARR
5:50 growth, year-over-year (YoY), month-over-month (MoM), compounded monthly growth rate (CMGR)
9:01 gross profit (aka gross margin), how to calculate
10:49 LTV: CAC ratio - understanding customer lifetime value vs. ad spend
14:25 customer retention/churn metrics - customer retention by cohort tables
21:08 active customers/users
22:16 customer acquisition cost - way to break out paid vs. blended CAC
24:49 burn rate & runway

By the end of this video, you will understand how to evaluate the metrics of early-stage startups and which KPIs venture capitalists will be most focused on.

If you have questions - please leave a comment below and I'll try to help. Cheers!

#startupmetrics #KPIs #startups

[shakirhasan]

So amazingly well explained. I knew the basics of all of these metrics prior to watching this but by watching it those basics seem to have so much more clarity now. Amazing amazing way of simplifying and explaining everything Eric. God bless!

[keyspanmusic]

Thanks Eric for keeping us learning and Excelling! Great stuff as always 🙌

[eric_andrews]

Any metrics I didn't cover which you think are important? Please share them below 👇👇 !!

[oussamaoussama]

Your videos are amazing, keep the good stuff.

[eric_andrews]

Questions? Let me know in the comments happy to discuss.

[saarrun]

Every metric clearly explained. To the point. Awesome video!

[thetanuagrawal]

Thanks for this, very well explained.

[abbywilliams]

Thanks for the amazing content, can you make a video on creating marketing dashboards? That would be really useful!

[elenatertyshnyk]

Eric, thank you for useful metrics.
Could you please precise in calculation of CAC, why we number of new customer divided by advertising spend, and not vice versa?

[jonathanedward]

Prepping for a VC interview. This is super helpful. Thank you!

[kacperjurasz]

Great video! Shouldn't you divide advertising spend / total customers instead of total customers / advertising spend at 22:16 ? Thanks!

[jninlove]

I really appreciate your informative video.

[louiesumalinog]

How about Operations KPI or Metrics for E-commerce? Do you have suggestions for monitoring specifically what VC might look into?

[savitaicesoonthornsaratoon]

This video is really useful . Thanks 😊

[FlutterPythoncombo]

I learnt a lot here . Love to buy coffee 4 u bro

[Matt.Collins]

Eric, excited to watch this, did you mention a place to download this ?

[ccaazzoorr]

Do venture analysts to to analyse past results of a startup or for the business plans of next years ?

[omaryassersharkawy]

Hi Eric, When calculating Average revenue per user for example do you use the total operating revenue (Includes GMV) or do you use the normal revenue (commissions)?

[quentinacbl]

Hi ! Great job very detailed and well explained ! I just have one question, these are usually for SaaS types of startups right ? Regarding ARR/MRR, what should be the recurring revenues for a startups that sells manufactured goods ? Therefore having volatile sales (in my case I'm looking at one that is at very early stage, just forecasts are available).
Many thanks in advance, keep up the good work !!

[talebbagazi]

May you do an example to cover these matrices, sort of a module for an early stage business? i have watched Saas, market place module but to link those matrices would be something great