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When you’re talking to any investor, angel or otherwise, you need to be able to tell a story about your business and support it with meaningful metrics. Without those metrics, the story lacks substance, direction, and credibility. So how do you know which metrics are meaningful, both in measuring your own business and presenting to investors?
Understand What Traction Means For You
Ultimately, the metrics that matter most to your story are the ones that show your traction in the market. Before you pick which ones seem most appealing or readily available, ask yourself a few key questions:
· What is your market and what does it look like?
· What pain point are you trying to solve?
· What behavior are you trying to change?
· Who is your ideal customer?
· How does he/she use your product?
When you have concrete answers to these questions, you can determine which metrics are nice to have, and which are critical to successfully telling you story to investors.
Still, There Are Several Metrics Angels Look For
It’s up to you how you use them in your pitch or in conversation, but you should know them in order to directly and effectively answer questions.
Product Usage (Month over Month)
· Time Users Spend Using Product
· Organic Growth
· How Much Usage and Growth Comes from Referrals
· How Much Product Usage is Repeat Usage
· Number of Non-Paying vs. Paying Customers
· Conversion Rate of Non-Paying Customers to Paying Customers
· Total Number Customers
· Number of Customers Month over Month
· Growth Rate (total, annual, and month over month)
· Lifetime Value
· Cost of Acquisition
Partner Growth (Month Over Month)
Depending on what your business does, you can use this in addition to customer growth, as a substitute for customer growth, or it exclude it altogether from your data.
*The goal here is to show clear trend lines
· Total Revenue Month Over Month
· Total Revenue Quarter Over Quarter
· Total Revenue Year Over Year
Chances are many of these metrics are crucial to your story. However, don’t forget about the metrics that relate to your core business. Just because investors don’t know to ask for them doesn’t mean they aren’t critical to your success.