The Founder’s Guide to Finance: 20+ Metrics to Track in 2024

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Arc Team


As a founder, you could track virtually a million metrics to determine whether your startup’s performance is positive, but as with most things in life, 80% of the results come from just 20% of the inputs. To help, we've cut through  the noise and outlined the twenty or so metrics you’ll want to track to ensure you’re heading in the right direction. To be honest, some of these are pretty basic while others are fairly complex, also, some only apply to startups with specific business models—that’s why there’s no such thing as a “one size fits all” dashboard. We’ve also bundled them into categories, so you can address them with the functional leaders in your organization that are responsible for them. Ready? Let’s dive in!

An overview of revenue-related metrics


Let’s start at the top, with revenue. This is by far the simplest metric and arguably the most important for early-stage startups. While there are a virtually unlimited number of revenue models, revenue itself is a standard metric across the board. It's the total sum of money that your startup generates during a given period from the sale of products or services. That said, not all revenue is created equal, recurring revenue is often treated as the “gold standard” in venture, e.g. the more recurring revenue you have, the higher valuation your startup will have (all things equal).

Monthly recurring revenue (MRR) 

As mentioned above, this is the gold standard when it comes to revenue. It's the total amount of revenue you consistently generate month over month from the same pool of customers. This can take multiple forms, e.g. subscriptions, memberships, recurring services, and even usage-based charges (such as AWS). MRR is important because it's a predictable and standardized measure of growth over time.

Average revenue per account (ARPA)

As the name suggests, average revenue per account measures the amount of money your startup makes per paid account. ARPA provides insights into your pricing strategy, customer retention, and overall revenue growth and can be used to compare yourself against peers. ARPA is particularly useful for businesses with multiple users per account or where the pricing structure varies based on the features or usage levels associated with each account. Calculate your ARPA by dividing your MRR by your total number of accounts.

Average revenue per user (ARPU)

While ARPU is similar to ARPA, the average revenue per user looks at the average revenue generated from each user (rather than account). It is commonly used in software businesses that charge for individual seats or licenses. In this case, the ARPU is the cost per seat, whereas the ARPA is the total value of the umbrella account that houses the individual seats. Examples of businesses that look at both ARPU and ARPA, include Salesforce, Slack, Outreach, Asana, and Notion. Calculate your ARPU by dividing your total MRR by your total number of paid users.

Revenue growth rate (RGR)

Revenue growth rate describes the rate at which a startup’s revenue is growing over a specific period compared to the prior period. It indicates the startup’s ability to increase sales over time. A positive revenue growth rate indicates that the startup is increasing its revenue over time, which is generally considered a positive sign of business health and expansion. Conversely, a negative growth rate suggests a decline in revenue, which could indicate challenges or problems within the startup’s operations or its market. To calculate your revenue growth rate, take your total revenue in the current period minus your total revenue in the previous period, divided by the total revenue in the previous period. Then multiply that number by a hundred.​

Revenue concentration (RCR)

Revenue concentration refers to the distribution of a startup's total revenue across its various customer segments, products, or geographic regions. It measures the extent to which a startup relies on a small number of customers, products, or markets for a significant portion of its revenue. The greater the concentration, the more vulnerable a startup’s revenue streams are to regulatory changes, currency fluctuations, economic-environmental changes, and geopolitical instability. To mitigate the risks associated, startups typically diversify their customer base, expand their product offerings, and open up new markets. To calculate the revenue concentration rate of a particular product, or market, take the revenue you generate from that segment divided by your total revenue, and multiply that by 100.

An overview of margin-related metrics

Gross margin

Gross margin measures the percentage of revenue retained after deducting the cost of goods sold (COGS). It reflects the efficiency of production and pricing strategies and indicates how well the company is controlling direct production costs. The higher your gross margin, the better. Software companies typically have higher gross margins because they have very low COGS. To calculate your gross margin, take your revenue minus your cost of goods sold, and divide that by revenue. Then multiply the result by one hundred.

Operating margin

Operating margin measures the percentage of revenue that represents operating income after deducting operating expenses such as salaries, rent, utilities, and marketing expenses. It reflects the startup’s ability to generate profits from its core business activities. To calculate your operating margin, take your operating income divided by your revenue, and multiply the result by one hundred. The higher your operating margin, the better.

Contribution margin

Contribution margin measures the percentage of revenue available to cover fixed costs and contribute to profit after deducting variable costs. It helps assess the profitability of individual products, services, or business segments. To calculate your contribution margin, subtract your variable costs from your revenue, divide by your revenue, and then multiply by one hundred. The higher your contribution margin, the better.

EBITDA margin

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin measures the percentage of revenue that represents EBITDA, which is a measure of operating profitability before non-operating expenses. It provides insight into the startup’s core operating performance. To calculate your EBITA margin, divide your EBITA by your revenue and multiply by one hundred. The higher your EBITA margin, the better.

Net profit margin

Net profit margin measures the percentage of revenue that represents net income after deducting all expenses, including COGS, operating expenses, interest, taxes, and other non-operating expenses. It reflects the overall profitability of the business. To calculate your net profit margin, take your net income divided by your revenue, then multiply the result by one hundred. Again, the higher your net profit margin, the better. Note: most early-stage startups do not generate net income, so this metric may not be relevant.

An overview of acquisition and retention-related metrics

Customer acquisition cost (CAC) and CAC payback

Customer acquisition cost measures the effectiveness and efficiency of a startup’s marketing and sales efforts in acquiring new customers. To calculate your CAC, take your total sales and marketing expenditures (including headcount/salaries) in a period divided by the number of new customers you acquired in the same period. Generally speaking, the lower your CAC, the better. That said, typically startups have different CAC targets based on the size of the opportunity: the larger the opportunity, the higher the target CAC. CAC payback refers to the amount of time (usually in months) it takes to recoup the costs of acquiring a new customer.

Customer lifetime value (CLV)

Customer Lifetime Value (CLV or LTV) is a metric that represents the total value a customer brings to a startup over the entire duration of their relationship with that startup. In other words, it measures the amount of revenue a company can expect to earn from a single customer throughout their lifetime as a customer. Calculating LTV is a bit more complicated, as it takes into account factors such as repeat purchases, subscription renewals, cross-selling, and upselling opportunities, as well as any associated costs such as customer support and retention expenses. The higher the LTV, the more you can spend on acquiring the customer and the more favorable your startup looks to investors.


LTV:CAC Ratio, also known as the customer lifetime value to customer acquisition cost ratio, measures the efficiency and effectiveness of a startup’s customer acquisition efforts relative to the lifetime value of those acquired customers. A higher ratio indicates that the lifetime value of customers exceeds the cost of acquiring them, while a lower ratio suggests that the cost of acquiring customers is higher than the value those customers generate over their lifetimes. You should aim for an LTV:CAC of 3:1 or higher, which indicates strong profitability from your customer acquisition efforts. Note: most early-stage startups will NOT have an accurate view of their LTV or CAC, because they have not reached the necessary scale.

Churn rate

Churn rate measures the percentage of customers who stop using a company's product or service over a specified period, e.g. those who cancel their subscriptions, cease purchasing products, or discontinue using services. To calculate your churn rate, take the number of customers you lost during a period divided by the number of customers you had at the beginning of the period, and multiply that number by one hundred. High churn rates can indicate dissatisfaction among customers, poor product-market fit, or ineffective customer retention strategies, thus you want to aim for a low churn rate.

Net revenue retention (NRR)

Net revenue retention measures the change in revenue from existing customers over a specific period, accounting for factors such as upgrades, downgrades, cancellations, and churn. It provides insight into the ability of a startup to retain and expand revenue from its existing customer base. To calculate your NRR, divide your revenue from existing customers at the end of the period by your revenue from the same customers at the start of the period, and multiply that result by one hundred. An NRR of over 100% indicates that the startup is generating more revenue from its existing customers at the end of the period compared to the beginning, after accounting for churn. This suggests that the startup’s expansion revenue from existing customers outweighs any revenue lost from churned customers. The higher your net revenue retention, the better!

Other potentially relevant metrics to track as a startup founder in 2024

SaaS quick ratio

SaaS Quick Ratio, not to be confused with “quick ratio”, looks at the amount of monthly recurring revenue (MRR) added through new acquisitions and expansion efforts compared to the amount of MRR lost to account contraction and churn. Measuring the SaaS quick ratio is important because losing lots of customers while simultaneously growing, is generally looked down on by investors—you can think of it like filling a leaky bucket, the more holes in the bucket, the harder it is to keep up or even fill it. To calculate your SaaS quick ratio, add the MRR added during the period through the onboarding of new customers with the MRR added during the period through the expansion of your current accounts. Divide that number by the sum of your churned MRR and non-churned, but contracted MRR (e.g. customer is on the $299/mo plan at the start of the period and downgrades to the $199/mo plan). A SaaS quick ratio of 4 or higher is considered good for early-stage companies.

SaaS magic number

The SaaS magic number looks at the efficiency of a startup’s sales and marketing efforts in driving growth, more specifically its revenue growth against its customer acquisition costs. To calculate your magic number, divide your net change in revenue over the period by your net change in sales and marketing expenses in the same period. A Magic Number above 1 indicates that the company is becoming more efficient with its sales and marketing efforts, whereas a number below 1 means it's becoming less efficient. The higher the Magic Number the more efficiently a startup can grow without needing to increase its sales and marketing expenses proportionally.

The rule of 40

The Rule of 40 assesses the overall health and growth potential of a startup by evaluating the balance between its revenue growth rate and profitability (measured by its EBITDA margin or gross margin). For example, if a company has a revenue growth rate of 30% and a gross margin of 20%, its Rule of 40 score would be 50%. Investors consider a SaaS company “healthy”  if it has a combined growth rate and profitability rate of 40% or higher because it shows that the startup can simultaneously capture market share and long-term value.

Cents on the dollar

Cents on the dollar isn't a widely recognized metric, it looks at the efficiency of marketing and sales separately and breaks down how efficient each organization is, based on the dollars spent and related revenue generated, e.g. for every $XXX in sales or marketing spend, you generate $YYY and $ZZZ of new ARR. Founders can use these metrics to determine whether to invest more in sales, marketing, or neither and just maintain the status quo. Consider breaking down the new ARR into two buckets: new ARR from existing customers (e.g. cross-sells and upsells) and from newly acquired customers in the same period rather than aggregating the two.

Committed monthly recurring revenue (CMRR)

Committed monthly recurring revenue (CMRR) is a forward-looking SaaS metric that combines monthly recurring revenue (MRR) with future booked revenue and period-specific churn data to provide a better sense of recurring revenues. While calculating your CMMR, you’ll want to look at the value of the executed (signed) software contracts, which have not been recognized as revenue yet (because no product has been delivered and no service has been performed). For example, if you sell a contract on September 26th, with a start date of October 1st, your MRR shouldn’t change until October 1st, but your CMRR changes on the execution date, September 26th.

Burn Rate

All founders should be familiar with “burn rate”, it's the difference between the gross revenue collected (inflows) and operating expenses (outflows) in a given period. Most early-stage startups burn money  to grow their operations, thus burn (to a certain extent) is generally accepted. However, burn without growth, or burn with minimal growth is a recipe for disaster and should be avoided at all costs. For more information, check out this guide on burn rate.


Similarly, “runway” is a concept that all founders should be familiar with and track religiously. It refers to the length of time a company can continue to operate before it runs out of funds, typically measured in months. Generally speaking, startups should aim to maintain a minimum runway of 18 months, which can be accomplished by: (i) increasing their revenues (or selling them through receivables factoring); (ii) cutting their expenses; and (iii) raising money from investors (equity financing). This is the preferred order of operations to increase runway, though some pre-revenue companies skip straight to step three.

Wrap up - the 20+ Metrics to Track in 2024

If you’ve made it this far, congrats, you’re now a finance rockstar! As you probably concluded, there are a ton of things that you can track, but as they say: “just because you can, doesn’t mean you should”. That said, all early-stage startups should track their revenue growth rate, their churn, their burn, and their runway, the four metrics that make up the foundation of most dashboards. Founders, you should know those metrics by heart and track them at least weekly (if not daily). As you progress in your journey, consider adding a few metrics at a time, especially those unique to your business model, industry/segment, and stage. Having access to the data is important, more important is making decisions based on it, do not let analysis paralysis set in. Instead, take swift action, and if things don’t go as planned, make adjustments on the fly—you’ll thank yourself later.

If you have questions or want to discuss any of these metrics in detail, get in touch with us at!

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