How to Use KPIs to Tell a Story During Your Series A Funding Round

Key performance indicators (KPIs) are key to understanding your business. And as you raise your Series A, the KPIs you share with would-be investors tell a story about your growth to date, as well as your startup’s future growth potential. 

Investors want to see more than just revenue and cash flow numbers in your pitch deck. They’re looking for proof that your business is scalable, your customers are loyal, and your growth trajectory is solid. Including the right KPIs in your Series A pitch will showcase your company’s success (and future potential) in a way that captures their attention.  

If you’re a SaaS company getting ready for a Series A funding round, here are the KPIs that will tell your story to potential investors – and successfully raise funds for your startup. 

1. Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) 

Monthly recurring revenue (MRR) represents the monthly revenue generated from customers’ ongoing software subscriptions. MRR is a critical metric for assessing revenue stability and growth potential. Use this KPI to: 

• Forecast revenue, 
• Evaluate the impact of customer churn, and 
• Measure the success of marketing campaigns 

Similarly, annual recurring revenue (ARR) extends that view over the course of a fiscal year. A strong ARR is critical when talking to Series A investors, because it illustrates that your business is built for long-term success. When raising funds, a good benchmark to aim for is $1,000,000 in ARR, with growth potential. 

Need help figuring out your MRR and ARR? Consider the advantages of outsourcing your accounting function ahead of your Series A fundraising round. 

2. Customer Churn Rate and Net Promoter Score 

Customer churn rate measures the percentage of customers who cancel their subscriptions or do not renew within a given period. High churn rates can indicate issues with product satisfaction, customer support, or competitive pressures. Measuring and reducing churn is essential for SaaS companies to maintain long-term revenue growth and customer lifetime value. 

Net promoter score (NPS) is an indicator of your customer satisfaction and loyalty. This KPI measures your customers’ willingness to promote your product and help you gain new customers. You find this KPI by regularly sending out customer surveys that ask, “How likely are you to recommend this software?”  

Your churn rate and NPS are your reality checks — how many customers are leaving and why? How happy are your customers that are staying? A low churn rate and a strong net promoter score are key KPIs that investors in a Series A financing will look for, so be prepared when they ask about this metric. 

3. Customer Acquisition Cost and Customer Lifetime Value  

How much does it cost for you to acquire a new customer? How much per customer are you spending on marketing? Are you paying any commissions? What other selling expenses do you have? These are questions you can anticipate from potential investors. Plan to provide your customer acquisition cost and customer lifetime value upfront. 

To calculate your customer acquisition cost (CAC), you divide your total sales for a period by your marketing and selling expenses for the same period. Monitoring your customer acquisition cost keeps your customer acquisition efforts cost-effective and sustainable. 

After you’ve acquired your customers, you need to monitor your customer lifetime value (CLV). CLV estimates the total revenue a customer is expected to generate throughout their relationship with the company. This KPI is calculated by multiplying the average revenue per customer by the average customer lifespan.  

Regularly monitoring CLV encourages SaaS startups to prioritize customer retention efforts, identify high-value customers, and allocate resources effectively to maximize profitability – all of which sounds great to investors. 

For Series A financing, you will want a customer acquisition cost that is scalable and reasonable in relation to customer lifetime value. For example, if you are selling into enterprise organizations, it’s okay to have a high customer acquisition cost and a longer sales cycle. If you don’t have an in-house CFO or controller to accurately shape your customer acquisition story within your Series A pitch deck, you may consider an outsourced accounting service to augment your startup’s financial team. 

4. Revenue Growth Rate and User Growth Rate 

Revenue growth rate measures the percentage increase (or decrease) in a company’s revenue over a period of time. This KPI is measured by comparing revenue from two different periods, and it shows growth trends over time.  

User growth rate, similarly to revenue growth rate, measures the percentage increase (or decrease) in a company’s users over a period of time. Increased revenue and user growth demonstrates that your startup is growing – and that it’s a strong company to have in an investment portfolio. 

Why KPIs Matter for Your SaaS Journey 

KPIs are more than just metrics — they’re key storytelling mediums. Your KPIs give investors the information they need to understand your company’s growth, health, and future potential.  

And KPIs aren’t just for investors. When you track and analyze the right data, you gain invaluable insights into your startup’s performance, your customer’s behaviors, and even how you compare to competitors.  

Navigating which KPIs to put in your pitch deck can be tricky, but you don’t have to do it alone. Working with experienced accounting advisors can help you refine your strategy. The Outsourced Accounting Services team at Wolf & Company works with you to track the KPIs that matter most for your business. With the right KPIs – and the right support – you’ll be well-equipped to secure the funding your startup needs.