CAC payback period and NRR certainly tell investors a lot about the financial stability and profitability of your business but they aren’t the only metrics that will impact your valuation.
In its 2021 Financial & Operating Benchmarks Report, OpenView identified the value drivers that investors look at - regardless of funding stage.
Depending on your business stage and industry context, OpenView suggests that you should be able to illustrate performance with metrics across 4 key areas:
1. Size and growth
As it sounds, here investors will expect to see metrics that relate to the size of your business and its growth over time. Metrics include:
- No. of employees
- Total amount of funding to date,
- Annual recurring revenue (ARR).
For financial performance, think about your costs and spend as well as income. The OpenView report identified sales and marketing spend, research and development spend, and gross margin as the key metrics here.
3. SaaS value drivers
These are the guiding light metrics mentioned above. While business size, spend, margins and diversity, equity & inclusion are important, it all falls down if you can’t prove that your business is financially viable. In addition to CAC payback period and NRR, you should cover gross dollar retention here too.
Diversity is becoming an increasingly important aspect of running a business and growing a team. According to Openview, leadership teams are under the spotlight with women in leadership and black, indigenous and people of colour (BIPOC) in leadership key metrics to focus on.