The key metrics investors usually look at in a Series B
When a startup company is seeking to raise funds from investors, there are a number of key metrics that potential investors will look at in order to assess the business. Some of the most important metrics include the company's revenue and growth rate, profitability, burn rate, unit economics and total addressable market.
Investors will also want to see a clear path to profitability and evidence of strong customer demand. In addition, they will pay close attention to the quality of the management team and the strength of the company's competitive position. By understanding these key metrics, startups can increases their chances of successfully raising capital in a Series B fundraising round.
A startup is a company or organization in its early stages, typically characterized by high uncertainty and risk. A startup's growth rate is the rate at which it is adding new customers and revenue. A startup's growth rate is critical to its success; if a startup cannot grow quickly enough to achieve profitability, it will often fail. There are a number of factors that can affect a startup's growth rate, including the quality of its product or service, the size of its market, and the effectiveness of its marketing efforts. Achieving strong growth can be difficult, but it is essential for startups that want to survive and thrive in the long term.
A profitable startup has a sustainable business model that generates revenue and covers its costs. This allows the startup to grow and scale its operations. In addition, profitability provides the startup with the resources it needs to invest in new products and services. As a result, profitability is essential for any startup that wants to be successful in the long term.
A startup's burn rate is the rate at which it is spending money. More specifically, it is the amount of cash that a startup is spending each month, divided by its monthly revenue. A high burn rate can be a sign that a startup is in trouble, as it may be indicative of a lack of funding or an unsuccessful business model. On the other hand, a high burn rate can also be a sign of a thriving startup that is rapidly growing and investing in its future. In either case, it is important for startups to closely monitor their burn rate and make sure that they are not spending more than they can afford.
Total addressable market
A company's total addressable market (TAM) is the estimated revenue opportunity from all current and potential customers for a particular product or service. The total addressable market is important for businesses to understand because it provides a top-level view of the opportunity for growth. When estimating TAM, businesses typically start with the number of potential customers in their target market, then adjust that number based on factors like customer need, willingness to pay, and competition. Although estimating TAM can be complex, it's an important part of business planning because it can help companies set realistic sales goals and make informed decisions about product development and marketing.