The 7 Startup Metrics That Matter

When you're building a startup, especially in the early stages, it's easy to drown in data. Daily active users, MRR, CAC, NPS—the acronyms pile up fast. But here's the truth: most metrics are noise. The right ones, when tracked consistently, can mean the difference between scaling smart and scaling into the ground.

At Henson Venture Partners, we advise early-stage founders on what to measure—and what to ignore. Whether you're bootstrapping or raising your first round, these seven metrics will keep your company focused, aligned, and fundable.

1. Customer Acquisition Cost (CAC) How much does it cost to acquire a customer? This is foundational. You need to understand the full cost of your marketing and sales efforts—ads, tools, people—and divide that by how many customers you close. If your CAC is high, you're either targeting the wrong audience or your sales process needs tightening.

2. Customer Lifetime Value (LTV) LTV tells you how much revenue a customer will bring in over the course of their relationship with you. High LTV means sticky product-market fit. Investors love seeing a healthy LTV:CAC ratio (ideally 3:1 or better).

3. Churn Rate Churn is the enemy of growth. If customers are leaving, you’re constantly refilling a leaky bucket. For SaaS startups, anything above 5–7% monthly churn in the early days should raise eyebrows.

4. Monthly Recurring Revenue (MRR) Consistent revenue is the fuel for your runway. Track new MRR, expansion MRR, and churned MRR separately to understand what’s driving growth—or decline.

5. Burn Rate & Runway Cash is king. Know how much you’re burning each month and how long your cash will last at the current burn. Founders who don’t track this are the first to be blindsided.

6. Activation Rate This tells you how many users hit their “aha” moment. It’s the bridge between acquisition and retention. Define what activation means for your product (e.g., sending a message, completing setup) and optimize toward it.

7. North Star Metric Every startup should have one key metric that ties back to core value delivery. It could be weekly active users, orders placed, or videos published—whatever shows customers are getting what they came for.

Focus > Everything The best startups track fewer metrics—but track them religiously. These numbers should guide your team meetings, your investor updates, and your product roadmap. Ignore the rest.

Need help identifying or optimizing your metrics? Henson Venture Partners helps founders build smarter, faster, and more fundable companies. Let's talk.