SaaS metrics that matter at the early stage

At Vendep Capital, we review hundreds of B2B SaaS startups each year. While many founders bring compelling visions and impressive teams to the table, there's a surprising gap that sinks countless promising pitches: the metrics.

Too often, the numbers that should form the foundation of any SaaS success story are either missing entirely, misrepresented, or completely misaligned with the company's stage. This isn't just a minor oversight, but it actually kills deals.

For founders, how you define and present your metrics can make or break investor interest. Present them poorly, and you'll face a barrage of skeptical questions. Get them right, and you'll build the conviction investors need to write checks.

For founders, how you define and present your metrics can make or break investor interest.

Here's the encouraging reality: the metrics we investors care about aren't some closely guarded secret. They follow a predictable evolution as companies mature from Seed to Series A funding.

In this post, I'll walk you through the most common metric mistakes I see founders make, then show you exactly what investors prioritize at each stage, so you can present your startup's story with clarity and confidence.

Some common pitfalls

Before diving into what works, let's address what doesn't. These mistakes show up in pitch after pitch, and they're entirely avoidable.

1. Confusing ARR and bookings

We often see founders blur the line between bookings and ARR. A signed contract or a one-off pilot is not the same as annual recurring revenue. True ARR should represent contracted, repeating revenue.

Inflating ARR with pilots, POCs, or heavy discounts might look impressive in your deck, but it backfires fast. Once the real ARR story comes out during due diligence, it can torpedo your entire fundraising process.

2. Ignoring the churn reality

Some founders report only gross churn ("we only lose 5% of customers a year") while conveniently leaving out net revenue retention (NRR). In SaaS, expansion is just as important as retention – sometimes even more so.

A company losing customers at the top but growing existing accounts can still have excellent NRR. Without both figures, investors can't see the full picture of your business health.

3. Fantasy CAC/LTV Ratios

"Our LTV is 10x our CAC" sounds impressive until you dig into the assumptions. If your model assumes customers stay forever or that CAC will magically improve at scale, it's not helpful but really misleading.

Early-stage LTV:CAC should be directional, not over-engineered. Transparency around your assumptions matters more than hitting some perfect ratio.

4. Growth without efficiency

Top-line ARR growth looks great on paper, but investors also care about how efficiently that growth is achieved. Burn multiples, payback periods, and gross margins all indicate whether you're building a sustainable engine or just burning cash with nothing to show for it.

The power of cohort analysis

Here's where understanding your revenue stops being blurry and starts telling the real customer story. Cohort analysis shows you how different groups of customers behave over time: who sticks, who expands, and where churn creeps in.

For every SaaS company, cohorts should be a critical piece of understanding product-market fit and long-term health. Getting this right early helps you see how revenue grows across different customer segments, understand why it's growing, and spot where it might be at risk.

But cohorts do more than just organize your data – they unlock insights across your entire business:

True retention visibility: See if newer customers are sticking better than older ones and how churn improves (or worsens) as your product develops.

Pricing intelligence: Discover how different pricing tiers perform over time and whether customers on certain packages expand more or churn faster.

Forecasting power: Your CFO loves this, as it gives you insights for better forecasting by giving a holistic view of how your customers behave and reduces reliance on new logo growth to hit your targets.

In our opinion you should start building cohorts the moment you have recurring revenue. Even with just a handful of customers, the patterns will start telling you stories that aggregate numbers never could.

What actually matters at Seed stage

Now that we've covered what not to do, let's talk about what seed-stage investors actually want to see. Here's the reality: your numbers don't have to be perfect, but they do need to be honest, consistent, and directionally strong.

The key questions investors ask at this stage are: Is there real traction? Do customers love it? Is there evidence of a repeatable motion?

Here are the metrics that help answer those questions:

ARR traction: Cleanly defined recurring revenue, even if it's small. A steady, growing base matters more than one-off spikes.

Customer validation: Quality logos, strong references, and clear signs of product-market fit.

Retention signals: Early cohorts showing repeat usage, renewals, or willingness to expand.

Efficiency mindset: Early CAC data, even if incomplete. Just showing you're measuring it demonstrates the right thinking.

At this stage, investors expect transparency over perfection. If churn is high, explain why. If CAC is uncertain, show the experiments you're running to improve it. We know the numbers won't be perfect, but owning them builds trust.

Raising the bar for Series A

By Series A, expectations shift dramatically. The question moves from "does it work?" to "can it scale?" That means your metrics need to prove repeatability, scalability, and efficiency:

Sustainable growth: ARR above €2M, with consistent quarter-on-quarter growth. Note: this benchmark has risen recently due to AI companies setting new standards.

Net Revenue Retention (NRR): Ideally >100%, showing that customers not only stick but expand. One often-overlooked NRR lever is pricing and packaging. The strongest SaaS companies design their models so customer value and revenue move in sync – usage grows, seats expand, and tier upgrades feel natural. Without expansion-ready pricing, even your happiest customers can leave your NRR stuck at 100%.

Sales efficiency: CAC payback period under 18 months, proving that capital can scale customer acquisition profitably.

Unit economics: Gross margins in line with SaaS benchmarks (70%+), demonstrating true scalability.

Operational discipline: Clean cohort analysis, churn dashboards, and revenue recognition practices that inspire confidence in your ability to manage growth.

Series A investors want to see that growth isn't just happening, but it's repeatable and defensible.

The bottom line

The difference between Seed and Series A metrics comes down to one fundamental shift: from promise to proof.

At the Seed stage, you're showing that something real is happening. Your metrics don't need to be perfect, but they should clearly indicate that you've built something people actually want, with early signs that it can stick and scale.

By Series A, the bar moves higher. Now investors need evidence that your growth engine works consistently, not just with your first customers. They want to see that additional capital will fuel sustainable growth rather than just mask underlying inefficiencies.

But it’s good to remember that metrics don't close rounds by themselves: great teams and products do. But messy or misrepresented numbers can kill a deal faster than you'd expect.

The best founders we work with don't just share the metrics investors expect. They explain the story behind them, the experiments they're running, and how those numbers will evolve as they scale from Seed to Series A.

Get your metrics right, and fundraising becomes a conversation about growth. Get them wrong, and you'll spend your time explaining rather than inspiring.

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If you're looking for good SaaS metrics templates, here are a few we would go for:

• Oxx’s SaaS Metrics Template
• ‍SaaS Grid (starter plan free if you’re under $1M ARR)