Fundraising 101: Key metrics to include in your startup pitch deck

You need capital to scale your business, and more often than not, scaling quickly requires raising from investors. A pretty pitch deck is great, but investors see dozens of pitch decks a day. With venture funding starting to tighten, your pitch deck needs to give investors clear insight into your startup’s financials before making an investment decision.

Whether you’re looking to raise for the first time, preparing for a larger round of funding, or just starting to think through growth metrics, we’ve got you covered. Let’s look at 7 key metrics VC and angel investors care about, what they mean, when they matter, how to calculate them, and how real companies incorporated them into their actual pitch decks.

Jump to section:

• TAM
• Recurring Revenue
• Unit Economics
• Churn 
• Runway
• ARPU
• Revenue/employee

Total Addressable Market (TAM)

• What it is: The total potential revenue or number of customers in your target market 
• Why it matters: Few metrics matter more to investors than TAM, as it tells investors just how big your startup can be. Ultimately investors will filter beyond Total Addressable Market (TAM) to focus on Serviceable Addressable Market (SAM) and Serviceable Obtainable Market (SOM), but illustrating the total size of market is at the foundation of any pitch deck 
• When it matters: All stages (Pre-revenue, Early-stage, Growth-stage) 

• Pitch deck example:

Recurring Revenue

• What it is: Recurring revenue is the amount of “guaranteed” revenue your business brings in over a defined period of time; this is typically contractual / subscription-based
• Why it matters: Revenue is the most critical of all startup financials. With no revenue, there’s no business. Investors typically like to see ‘recurring’ revenue, often used in subscription-based businesses. In the early stages you’ll likely focus on Monthly Recurring Revenue (MRR), or even Weekly Recurring Revenue, rather than Annual (ARR).
• When it matters: Early-stage, Growth-stage

• Pitch deck example:

Unit Economics

• Why it matters: Unit economics are the lifeblood of your business, and strong unit economics let investors know you are able to scale efficiently. Keeping a pulse on your unit economics tells you what levers to focus on to become a long-term viable business, and how to continue growing during a downturn.
• When it matters: All stages (Pre-revenue, Early-stage, Growth-stage)

• Pitch deck example:

Churn rate

• What it is: At its simplest, churn is the percentage of existing customers that leave, or unsubscribe from your service, over a period of time. Defining churn accurately could become complicated (e.g., what if a customer leaves for a year and comes back?) To remedy this, choose a methodology and stay consistent with it throughout your deck. Typically, churn is calculated over the same period as recurring revenue.
• Why it matters: There are several reasons that investors care about churn, but two stand out. Tactically, churn is a key metric in revenue forecasting, and if churn is higher than revenue growth, you won’t have a viable business until this is remedied. More broadly, churn rates can be used as proxies for customer satisfaction and product stickiness.
• When it matters: Early-stage, Growth-stage

• Pitch deck example:

Runway

• What it is: Runway is how long your company has before running out of capital, and it’s a function of cash flow, or revenue coming in, and burn rate, or capital flowing out. To learn more about runway, feel free to access our free burn rate calculator, powered by Causal.‍
• Why it matters: Runway shows investors how efficient you are with cash on hand. Especially in SaaS, you need to invest to scale, but if your balance sheet shows investors you burn through venture dollars senselessly, you’ll be hard pressed to raise capital. Conversely, demonstrating thoughtful capital allocation and deployment and keeping a steady pulse on your runway is a strong signal to investors.‍
• When it matters: Pre-revenue, Early-stage

• Pitch deck example:

Average Revenue per User (ARPU)

• What it is: ARPU quantifies the average amount of revenue generated per user (or customer)
• Why it matters: ARPU illustrates the value of your product by customer segment. It is used to determine how to allocate additional resources (e.g., talent, capital), and tells investors how you look at your customer base, how much your customers value your product, and where their capital may be best allocated.
• When it matters: Growth-stage

• Pitch deck example: 

Revenue per employee

• What it is: This one is as straightforward as it sounds - the ratio between revenue and employee headcount.
• Why it matters: Revenue per employee may not be included in every pitch deck, but it’s essential information for investors as it illustrates business productivity. It paints a picture of the average dollar value brought in by each employee, and thus incremental revenue from headcount growth. Looking at revenue per employee, alongside employee cost and tenure, will help illustrate the LTV of an employee to the company.
• When it matters: Growth-stage

• Pitch deck example:

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The metrics listed are intended to be broad and applicable across a variety of businesses, but are particularly relevant to SaaS startups. Keep in mind that the comprehensive list of metrics investors want to see in your pitch deck vary by industry and type of business. A few (non-comprehensive) examples that you’ll find in our pitch deck database from companies like Facebook, Vettery, Finix, and more include:

• Social media platforms typically disclose Daily, Monthly Active Users (DAUs/MAUs)
• Online marketplaces typically disclose Gross Merchandise Value (GMV)
• Fintech businesses typically disclose Total Payment Volume (TPV)

In summary, the health and potential of your business is based on more than just revenue and cost. Especially in a market downturn, investors will do their due diligence across all your core metrics before writing a check. Make sure your pitch deck paints a clear picture of your startup’s financial health and growth potential. Don’t forget to look through our free database of pitch decks for inspiration!