You know venture capital investors want to see ARR/MRR. And it can be tempting to lean heavily on your revenue story as you pitch equity investors, but that’s not all equity investors want to see. The kind of exponential growth a VC is looking for (10x-15x) happens when a company is reliable, disciplined, and scalable.
If you’re going to secure equity investment, you need to know how to prove your startup checks those boxes.
Beyond Topline Growth: Why Investors Dig Deep
Top-line growth might start the conversation, but it doesn’t tell the whole story. And savvy investors know it doesn’t guarantee a healthy business. Here’s what matters more: how efficiently a startup achieves growth. A SaaS company burning cash to inflate revenue without strong margins or payback discipline signals fragility, not scalability. That’s why investors look past vanity metrics like signups or downloads and focus on investable metrics such as LTV:CAC, burn multiple, and runway.
Metrics That Signal Investability
In the pitch room, no one cares about downloads or social media followers. Here’s what they do care about.
Unit Economics
Strong unit economics demonstrate whether your growth is scalable and sustainable. Rapid customer acquisition doesn’t matter on its own. Investors want to see an LTV:CAC ratio of at least 3:1 (signalling efficient customer acquisition spending). A payback period under 12 months demonstrates fast capital recovery. Your gross margins also matter, too. For SaaS, a gross margin of 70-80% typically indicates scalability. Being able to clearly explain your unit economics and their drivers can help you build credibility with potential investors.
Burn Multiple & Runway Discipline
Your burn multiple shows outside investors how efficiently you turn cash burn into revenue growth. A burn multiple under 2x signals disciplined spending, while anything higher raises questions about sustainability. Pair that with runway (how many months you can operate at your current burn rate), and investors have a sense of whether your growth is sustainable. Top SaaS companies typically maintain 10–18 months of runway, giving them flexibility to hit milestones and raise on their terms.
Customer Retention & Expansion
Customer growth and retention are two of the strongest signals for product-market fit. Investors see them as signals of reduced risk, proving that revenue growth is not only repeatable but compounding.
High Customer Retention Rate (CRR) and Net Revenue Retention (NRR) show that customers aren’t just sticking around, they’re deepening their commitment. Expansion revenue from upsells, cross-sells, or usage growth demonstrates that your product can scale within existing accounts, lowering acquisition pressure and boosting LTV.
If you’re pursuing equity investment, you might want to consider conducting a cohort analysis. Cohort analysis tracks groups of customers over time to reveal patterns in retention, engagement, or revenue that help founders understand long-term product performance and customer behavior. This can highlight your improving retention over time and further validate stickiness.
Qualitative Signals Investors Care About
In addition to having your numbers on lock, you can set yourself up for funding success by prepping the qualitative signals that reveal whether a SaaS startup can execute and scale with resilience.
Founder-Market Fit
Founder-market fit matters because investors see it as a predictor of resilience and execution, especially in shifting markets. When a founder has deep domain expertise, lived experience, or unique insight into a market, it signals they’re better equipped to anticipate customer needs and navigate industry complexities. This won’t be enough to secure investment on its own, but it adds a human edge, strengthening the business case of investing in your startup.
Sales & GTM Discipline
Investors want to see a go-to-market (GTM) that’s driven by a strategy that’s repeatable, scalable, and efficient. Equity investors want to see a clear sales pipeline with healthy conversion at each stage, a consistent customer acquisition process, and a predictable sales cycle.
An overreliance on “lucky deals” is going to raise a red flag for potential investors. That might look like depending on founder-led sales or one-off enterprise wins. Instead, you want to demonstrate that you have a disciplined GTM strategy that can grow beyond your network. You can do that by highlighting metrics like CAC payback period, win rates, and expansion revenue.
Finance & Reporting Maturity
Investors are looking for clean, accurate financials that provide visibility into the KPIs that matter for growth-oriented startups. Investing in financial systems, a fractional CFO, or reliable reporting tools sets you up for success during a raise (in addition to being good financial practice). Investor-ready dashboards, timely reporting, and consistent KPI definitions reduce friction during due diligence and speed up fundraising.
Red Flags That Kill Deals
- Over-reliance on vanity metrics like signups, downloads, social media followers, website visits, press mentions, or raw signups (without conversions).
- Lack of clarity on unit economics: If you can’t clearly show how much it costs to acquire and serve a customer vs. how much revenue that customer generates, investors won’t know whether growth is sustainable or scalable.
- Inconsistent reporting or fuzzy KPI definitions.
- Overoptimistic projections without proof points: This signals to equity investors that a founder is relying on hope rather than data.
How Founders Can Get Investory-Ready
- Build a dashboard that highlights the right metrics (LTV:CAC, burn rate and burn multiple, cash runway, CRR, etc).
- Align your capital strategy with growth milestones and know when you might not want to raise, even if you can.
- Invest early in building your CFO muscle (fractional CFOs, tools, and non-dilutive financing as bridge capital).
- Tell your story with data. Use these metrics to shape your funding narrative.
Extend Your Runway and Strengthen Metrics Before Raising
Waiting to raise until you’re in the strongest position to do so can help you preserve your equity, raise more, and ensure you can choose the investors who are best aligned with your vision and goals. Non-dilutive financing can help you extend your runway, so you have time to strengthen your metrics and raise on your terms.
