Key Metrics for Series A: What Numbers Investors Care About
Understand which metrics matter most for your Series A fundraise, how to calculate them correctly, and what benchmarks investors expect.
"What are your metrics?" It's one of the first questions every Series A investor asks. Your metrics tell the story of your business—whether you've found product-market fit, whether your growth is sustainable, and whether your unit economics work.
But not all metrics matter equally. This guide covers the specific numbers Series A investors focus on, how to calculate them correctly, and what benchmarks they expect. For broader preparation guidance, see our Complete Guide to Series A Readiness.
Metrics Tell Your Story
Great metrics don't just prove your business works—they demonstrate that you understand why it works. Knowing your numbers cold and explaining the drivers behind them builds investor confidence.
Metrics Overview
Series A investors evaluate metrics in four key categories:
Revenue & Growth
How big are you and how fast are you growing? ARR, MRR, and growth rates show traction.
Unit Economics
Do your economics work? CAC, LTV, and payback period show whether growth is sustainable.
Retention & Churn
Do customers stick around? Logo churn, revenue churn, and NRR show product-market fit.
Efficiency
How efficiently do you grow? Burn multiple and magic number show capital efficiency.
Revenue & Growth Metrics
ARR (Annual Recurring Revenue)
ARR is the annualized value of your recurring revenue. It's the foundational metric for SaaS companies.
ARR = MRR × 12
Series A benchmark: $1M-$3M+ ARR, though this varies by market
MRR Growth Rate
Month-over-month MRR growth shows your momentum. Consistent growth matters more than occasional spikes.
MoM Growth = (Current MRR - Prior MRR) / Prior MRR × 100
Series A benchmark: 10-20%+ month-over-month
MRR Components
Break down your MRR into components to show what's driving growth:
| Component | Definition |
|---|---|
| + New MRR | Revenue from new customers this month |
| + Expansion MRR | Additional revenue from existing customers (upsells, seat adds) |
| - Contraction MRR | Lost revenue from downgrades (customer still active) |
| - Churned MRR | Lost revenue from cancelled customers |
| = Net New MRR | Total change in MRR this month |
Unit Economics
Unit economics tell investors whether your growth is sustainable. A business that loses money on every customer can't grow its way to profitability.
Customer Acquisition Cost (CAC)
CAC measures how much you spend to acquire a new customer. It's typically calculated on a blended basis (all sales & marketing spend) or by channel.
CAC = Total Sales & Marketing Spend / Number of New Customers
Note: Some companies calculate "fully loaded" CAC including sales salaries. Be consistent and be prepared to explain your methodology.
Customer Lifetime Value (LTV)
LTV represents the total gross profit you expect to earn from a customer over their lifetime.
LTV = (Average Revenue per Customer × Gross Margin) / Churn Rate
Alternative formula: ARPA × Gross Margin × Average Customer Lifetime
LTV:CAC Ratio
The most important unit economics metric. Shows how much value you create for every dollar spent acquiring customers.
LTV:CAC Ratio = Customer LTV / CAC
Series A benchmark: 3:1 or higher (meaning you earn $3 for every $1 spent on acquisition)
CAC Payback Period
How long it takes to earn back your customer acquisition cost through gross profit contribution.
CAC Payback = CAC / (Monthly ARPA × Gross Margin)
Series A benchmark: Under 18 months, ideally under 12 months
Be Consistent
Different companies calculate these metrics differently. Whatever methodology you use, be consistent over time and be prepared to explain your calculation to investors who may define it differently.
Retention & Churn
Retention metrics are among the most important indicators of product-market fit. High retention means customers need your product; low retention means they don't.
Net Revenue Retention (NRR)
NRR measures how much revenue you retain and expand from existing customers, independent of new sales. It's the single most important retention metric.
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100
Series A benchmark: 100%+ (ideally 110-120%+)
Gross Revenue Retention (GRR)
GRR measures revenue retained before expansion. It shows the pure retention rate without the benefit of upsells.
GRR = (Starting MRR - Contraction - Churn) / Starting MRR × 100
Series A benchmark: 85%+ (meaning you retain at least 85% of revenue before expansion)
Logo Churn vs. Revenue Churn
Logo Churn
Percentage of customers who cancel in a given period.
Benchmark: <5% monthly or <10% annually
Revenue Churn
Percentage of revenue lost to cancellations and downgrades.
Benchmark: <2% monthly or <20% annually (gross)
Cohort Analysis
Cohort analysis shows how retention changes over time for groups of customers who started in the same period. It's the gold standard for understanding retention.
- Revenue cohorts: Show how MRR from each monthly cohort evolves over time
- Logo cohorts: Show what percentage of each cohort remains active over time
- Improving cohorts: Newer cohorts retaining better signals product improvements
Efficiency Metrics
Efficiency metrics show how well you convert capital into growth. In the current environment, capital efficiency is increasingly important.
Burn Multiple
Burn multiple measures how much you're spending to generate each dollar of new ARR. Lower is better.
Burn Multiple = Net Burn / Net New ARR
<1x: Amazing – you're generating more ARR than you're burning
1-1.5x: Great – very efficient growth
1.5-2x: Good – solid efficiency
2-3x: Concerning – may need to improve efficiency
>3x: Problematic – spending too much for growth
Magic Number
Magic number measures how efficiently your sales and marketing spend generates new revenue.
Magic Number = (Current Quarter ARR - Prior Quarter ARR) / Prior Quarter S&M Spend
>1.0: Excellent – every $1 of S&M generates >$1 of new ARR
0.75-1.0: Good – efficient enough to scale
0.5-0.75: Okay – room for improvement
<0.5: Inefficient – need to improve go-to-market
Rule of 40
The Rule of 40 balances growth and profitability. Growth rate plus profit margin should exceed 40%.
Rule of 40 Score = Revenue Growth Rate (%) + EBITDA Margin (%)
Most Series A companies are growth-focused with negative margins, so a score of 40+ typically requires very high growth (e.g., 100% growth with -60% margin).
Series A Benchmarks
Here's a summary of typical Series A benchmarks. Note that these vary by market, business model, and current fundraising environment.
| Metric | Good | Great | Exceptional |
|---|---|---|---|
| ARR | $1-1.5M | $1.5-3M | $3M+ |
| MoM Growth | 10-12% | 12-15% | 15-20%+ |
| Net Revenue Retention | 100-110% | 110-120% | 120%+ |
| Gross Margin | 60-70% | 70-80% | 80%+ |
| LTV:CAC | 3:1 | 4:1 | 5:1+ |
| CAC Payback | 18 months | 12 months | <9 months |
| Burn Multiple | <2.5x | <1.5x | <1x |
Context Matters
These benchmarks are guidelines, not requirements. Some companies raise Series A with lower metrics based on market opportunity, team, or strategic vision. What matters is whether your metrics tell a coherent story about a fundable business.
Calculating Your Metrics
Accurate metrics require clean underlying data. Common issues include:
- Revenue timing: Ensure MRR calculations match actual billing dates
- Gross margin: Include all COGS (hosting, support, implementation)
- CAC completeness: Include all sales and marketing costs, not just ads
- Cohort definitions: Be consistent about when a customer "starts"
- Churn calculations: Define clearly when churn is recognized
For guidance on preparing your financial data, see How to Clean Up Your Books Before Fundraising.
How to Present Your Metrics
- Show trends, not just snapshots: 12-18 months of history shows trajectory
- Explain anomalies: If a metric spiked or dipped, explain why
- Be transparent about weaknesses: Acknowledge weak metrics and explain your plan
- Provide methodology notes: Explain how you calculate key metrics
- Compare to benchmarks: Show how you stack up against industry standards
Metrics Dashboard
Include a clear metrics dashboard in your data room that investors can quickly scan:
- ARR and MRR trend chart
- MRR components breakdown (new, expansion, churn)
- Net revenue retention by cohort
- Unit economics summary (CAC, LTV, LTV:CAC)
- Burn rate and runway
Related Articles
Complete Series A Readiness Guide
Everything founders need to know
Financial Projections for Series A
Build a model investors trust
Data Room Checklist
What investors expect to see
Startup Runway Guide
Managing cash and burn rate
Need Help With Your Metrics?
Eagle Rock CFO helps startups calculate, track, and present their metrics for Series A fundraising. Let us help you tell your financial story.
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