5 Startup Financial Metrics Investors Actually Care About

Raising capital isn’t about dazzling investors with dozens of metrics. The truth? Most investors only care about a handful of numbers that show clarity, discipline, and traction. 

As founders, we’ve seen the anxiety that comes before a pitch deck review. You wonder if you’re tracking the right things, or if you’ll be caught off guard. 

The good news: you don’t need a spreadsheet with 50 KPIs, you need to master the 5 that matter most.

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What you’ll get from this post

📌 The 5 metrics that early-stage investors use to evaluate your startup
📌 Benchmarks to know if you’re on track
📌 Why these numbers matter more than vanity metrics
📌 Practical tips from Lazo on how to prepare them with confidence

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1. What’s your Annual Recurring Revenue (ARR) and why does it matter?

ARR is the backbone of SaaS and subscription-based startups. It tells investors how predictable and scalable your revenue is. Instead of short-term spikes, they want to see repeatability.

ARR basics founders should know:

• Shows stability and growth potential
• Top-quartile seed-stage SaaS startups grow ARR at 20% to 30% annually
• Even at Pre-Seed, investors want to see consistent month-over-month revenue growth

👉 Tip: Don’t just present ARR as a number. Show the story behind it: how you’re acquiring, retaining, and expanding customers.

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2. Why is Customer Acquisition Cost (CAC) critical?

Investors want proof you can acquire customers efficiently. CAC tells them how much you spend to bring in a new customer.

Key insight: If your CAC is too high, it signals your model may not be sustainable.

CAC benchmarks:

• Early-stage startups should aim for CAC payback in 12 months or less
• CAC becomes more important as you scale fundraising beyond Seed

👉 From Lazo’s experience: We’ve seen founders underestimate CAC by ignoring hidden costs such as sales team salaries, “founders” time, tools, and paid ads. Clean accounting and compliance practices make this number credible.

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3. What’s your Customer Lifetime Value (LTV)?

LTV shows the total revenue you expect from a customer over their relationship with your startup. Paired with CAC, it tells investors if you’re building a profitable engine.

Investor shorthand:

• A healthy LTV:CAC ratio is usually 3:1^*
• Anything lower raises red flags; anything higher can signal untapped growth potential

👉 Tip: Track retention rigorously. A long customer lifetime signals product-market fit and reduces investor risk.

👉 From Lazo’s experience: For early-stage startups, investors focus more on the trend toward a 3:1 ratio than the absolute number.

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*Source: Harvard Business School 

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4. What’s your Gross Margin?

Gross Margin tells investors how much revenue you keep after covering the direct cost of delivering your product or service. In simple terms, it shows whether your model can scale profitably.

Benchmarks:

👉 From Lazo’s experience: Founders often overlook this metric when focused only on growth. But investors know that healthy margins create the foundation for sustainable scaling and make every dollar raised more efficient.

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5. What’s your Burn Rate and Runway?

Burn rate shows how fast you’re spending cash. Runway tells investors how long you can survive before running out of money.

Why investors care: They want to know if their capital buys you enough time to hit the next milestone.

Rules of thumb:

• Pre-seed and Seed: At least 18 to 24 months of runway post-investment^*
• Keep monthly burn consistent; sudden spikes raise red flags
  

👉 Tip: Link your burn rate to a clear growth plan. If you’re spending aggressively, show how it accelerates ARR or reduces CAC.

^*Source: JP Morgan

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From Lazo’s experience

At Lazo, we’ve guided hundreds of founders through fundraising prep. The most common mistake we see is overcomplicating, trying to track 30+ metrics when only 5 to 6 really drive investor confidence. By focusing on ARR, CAC, LTV, Gross Margin, and Burn/Runway, you’ll cover 80% of the questions investors ask in the first meeting. And if you need deeper financial guidance, Lazo also offers Fractional CFO and Controller services to help you model, track, and present these numbers with investor-ready precision.

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What founders should do next

1. Audit your metrics with clarity. Are you tracking ARR, CAC, LTV, Churn, Gross Margin and Burn in a reliable way?
2. Ensure your incorporation and compliance are tight. For example, most U.S. investors expect a Delaware C-Corp setup.
3. Build your pitch deck around these numbers, not vanity metrics.
   

👉 Ready to strengthen your financial story? Talk to us and get investor-ready.

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