While the underlying metrics are stage, industry and business model dependent, there are 7 that Rajeev Gupta from ALIUM Capital and Jerry S. from OIF Ventures say would make a no-brainer investment this year:
💁 A lifetime value (LTV) to customer acquisition cost (CAC) of 3x and above. This means for every dollar spent on the cost of acquisition, you’re generating $3 of lifetime value.
🔥 A burn multiple of two times or less, which means for every $2 of burn, you’re generating at least a dollar of recurring income.
💰 Less than 12-months payback on your cost of acquisition.
🤝 Net dollar retention of above a hundred percent. 110% to 120% is a very strong metric which shows your net churn on your existing customer base is growing at 10-20% per annum.
📈 30-40% revenue growth and a gross margin of 70%, plus an operating margin of 2-3 years at 20-30%.
🧑 Revenue per employee of $150,000. If you can hit this amount, this means you can cover your employee costs.
🔬 20-30% R&D spend and 15-20% sales and marketing spend.
Psst: this snippet was taken from our most recent Q&A on efficient growth and profitability. Check out the full recording and summary wrap-up in the comments!
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