Key Startup Metrics
When performing a company health check, there are certain metrics that are going to matter more than others. In our experience, having a good handle on key performance indicators (KPIs) as defined by easily measurable and widely understood metrics is critical to understanding and communicating the current status of a startup.
In the attached article, Anu Hariharan of Y Combinator and Andreessen Horowitz partners - Frank Chen and Jeff Jordan - have identified 32 key startup metrics to “help investors gauge the health of a business when investing in it.” This a great list for a new investor or an early stage entrepreneur seeking to show meaning in their data. Knowing what each of these metrics means and how they may relate to a company creates an important, compelling communication channel for entrepreneurs and investors.
When communicating between an investor and a startup, less is more. Most companies will not track all of the metrics in this article. Instead, two or three key metrics should be adequate for a company to quickly assess the health of its business, and also tell a story when management or investors are discussing the company’s current business and future opportunities.
Chapman and Company has a couple of key metrics that it reviews with virtually every early stage company with which it works.
Total Addressable Market (TAM)
Recurring Revenue (RR) v. Total Revenue (TR)
Take a look at these and the 28 others in the articles attached. Thanks to the www.az16.com site for such strong startup content.