The north star here is 120% year-over-year growth.įor smaller SaaS companies like most of my clients, this is very achievable on a QUARTERLY basis. The first metric they'll check is your year-over-year (YoY) revenue growth rate to ensure you're already seeing success. Investors want to see that you're already growing before they get on board. Here's what you need to know about three metrics to build a SaaS business with a 20x or higher multiple. And you can be confident you're measuring the right things in your business. If you just focus on these three elements of unit economics - it’s all you need to win the valuation game (and build an enviable business). I’ve learned that SaaS investors really only care about three metrics: If your goal is to raise a round of funding to accelerate growth, you need to think like an investor and keep things simple. That's why you should focus on the metrics that investors care about. If you're focused on the wrong metrics, or can’t prove your results, you'll have a hard time convincing investors that your business is worth their time.
There are so many ways to measure a SaaS business these days, it's easy to get lost in spreadsheets. If you're trying to build a SaaS business with high valuation potential, you need to focus on metrics that matter.
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