Operational Metrics Report
Operational Metrics Report
Operational metrics provide a window into the day-to-day workings of a company.
For Venture Capitalists (VCs), operational metrics are essential for understanding a company's overall health and making informed investment decisions.
Operational metrics help VCs determine whether a company is on track to meet its goals, and to identify potential problems before they become too costly.
Start Tracking Your Operational Metrics: Use this Quest to track all of the operational metrics that you as a venture capitalist firm use to measure the success of your investments over time.
Our go to operational metrics are: Monthly Recurring Revenue, Churn Rate, Burn Rate, paying customer and employee head count, runway and more.
✅ Track Your Monthly Recurring Revenue
The Monthly Recurring Revenue (MRR) metric tells you how much money your clients are spending on your product or service each month. Tracking MRR helps you understand your growth and track your progress over time.
✅ Collect Investor Contact Details
Two of the most important metrics for VCs to track: Burn rate is the rate at which a company spends funds in order to sustain its operations. While churn rate is the % of customers who discontinue using your service in a given period of time.
✅ Upload Statements and Balance Sheets
Income statements show how much revenue a company has generated over a set time period. Balance sheets track a company's assets and liabilities, and cash flow statements track how much cash a company has generated and spent over a window of time.
What Are Some Common Operational Metrics Used by Venture Capitalists?
✅ Monthly Recurring Revenue (MRR): measures how much revenue a company is generating on a monthly basis. Ideally, you want to see MRR growing at a steady rate over time. This signals that the company is doing well and is likely to be around for the long haul.
✅ Annual recurring revenue (ARR): ARR is calculated by multiplying the annual contract value (ACV) by the number of active customers. This metric provides a snapshot of a company's potential revenue stream and can be used to estimate future growth.
✅ Burn rate: This measures how much cash a company is spending each month, and is often used to determine how long a company can continue to operate on its current funds.
✅ Churn rate: Is the percentage of customers who discontinue using your service in a given period of time. This metric is especially important for subscription-based businesses, as it can indicate whether or not you're able to retain your customers and grow your business.
✅ Runway: The amount of time your business has before it runs out of money.