Signals That Matter: How VCs Track Early-Stage Metrics
Series: Built to Scale – Week 8
Startups are built on uncertainty, but venture capitalists are trained to look for signals, data points that suggest a startup is not just moving, but moving in the right direction. For early-stage founders, this means one thing: your metrics matter long before your revenue does.
This week, I break down what metrics top VC platform teams track to assess progress, shape support, and prepare for follow-on funding. If you are only tracking MRR or “users,” you are missing the bigger picture.
Why Metrics Matter So Early
You may not have product market fit. You may not even have revenue, but you do need to demonstrate:
Learning velocity
Customer engagement
Repeatable acquisition
Evidence of a working funnel
Top VCs help founders build dashboards that signal momentum, not perfection.
The 5 Categories of Metrics VCs Watch Closely
1. Customer Discovery & Engagement
Number of interviews conducted
Conversion from waitlist to user
% of users who repeat a key action
Time to activation
2. Acquisition & Funnel Health
CAC (Customer Acquisition Cost)
Landing page conversion
Email or demo-to-signup conversion
Channel-specific performance
3. Retention & Stickiness
Daily Active Users (DAU)/ Weekly Active Users (WAU)/ Monthly Active Users (MAU) ratios
Cohort retention over 4–12 weeks
Churn rate
Product usage frequency
4. Revenue Signals (if applicable)
Monthly Recurring Revenue (MRR) / Annual Recurring Revenue (ARR) growth
% of users converting to paid
Average revenue per user (ARPU)
Expansion revenue
5. Operational Learnings
Experiments run
Days to iterate
Team speed (release velocity, sprint throughput)
These metrics give VCs visibility on one thing: Is this team learning and improving quickly enough to win?
Real Example: Tracking What Matters
A pre-seed B2B SaaS startup in Europe had only €1K in monthly recurring revenue, but their retention was 90%, their referral rate was 25%, and their product usage grew weekly. Because they tracked and communicated these metrics clearly (with VC support), they raised a strong seed round. Their momentum was not revenue. It was signal quality.
How VC Platforms Help
Help define stage-appropriate metrics
Set up basic dashboards (Airtable, Notion, Mixpanel)
Teach KPI storytelling in investor updates
Normalize “learning metrics” vs vanity metrics
Prepare founders for fundraising conversations
What Founders Should Ask Their VCs
“Can you help me define the right KPIs for our stage?”
“What signals do your platform teams look for in high-performing companies?”
“Can we build a simple dashboard together before our next board meeting?”
Wrapping Up
Metrics are not just for investors; they are for founders who want clarity. The best VCs do not just read the numbers; they help you generate the right ones, and they teach you how to interpret the story they tell.
References
Steve Blank. (2013). Startup Owner’s Manual
ProductLed. (2025). Product-Led Growth Benchmarks: Key SaaS Findings and Trends
Bernard Marr. (2024). Important User Engagement KPIs: What are DAU, WAU, and MAU?