Seed investors primarily want to see 6 core metrics: Monthly Recurring Revenue (MRR) or GMV growth rate, burn rate and runway, unit economics (CAC and LTV), gross margin, customer retention rate, and a 3-year financial model. Everything else is secondary.
But let's dig into each of these in detail, because understanding what investors want – and why – is the difference between a 30-minute pitch and a term sheet.
This is the first metric investors look at. For SaaS companies, it's Monthly Recurring Revenue (MRR). For marketplaces and e-commerce, it's Gross Merchandise Value (GMV) or Gross Transaction Value (GTV).
What investors want to see:
10-15% month-over-month growth minimum
Consistent growth over at least 6 months (not one-off spikes)
Ideally 3-4x annual growth rate
How to calculate:
MRR = Sum of all subscription revenue normalized to one month
MoM growth rate = (This month MRR - Last month MRR) / Last month MRR
Example: If your MRR is ₹5 lakhs in January and ₹5.6 lakhs in February, your MoM growth is 12%.
What to present: Show a 12-month MRR chart with growth rate annotated. Include a table showing MRR, new MRR, expansion MRR, churned MRR, and net MRR growth.
Red flags investors look for:
Inconsistent growth (20% one month, 2% next month)
Growth driven purely by discounting
Revenue recognized before services delivered (aggressive accounting)
Investors need to know how long your money will last and whether you'll need to raise again soon.
What investors want to see:
12-18 months of runway remaining
Clear understanding of your monthly burn rate
Path to profitability or next milestone (even if 24-36 months away)
How to calculate:
Gross burn = Total monthly operating expenses
Net burn = Gross burn - Monthly revenue
Runway = Current cash balance / Net monthly burn
Example: If you have ₹60 lakhs in the bank, monthly expenses of ₹12 lakhs, and revenue of ₹4 lakhs, your net burn is ₹8 lakhs/month and your runway is 7.5 months.
What to present: Show a simple table with current cash, monthly burn, runway in months. Then show a 24-month cash flow forecast demonstrating when you'll need to raise next.
Why this matters: Investors don't want to fund a company that will run out of cash in 4 months. You should be raising when you have 6-9 months of runway left, not 2 months.
Unit economics tell investors whether your business model is fundamentally profitable at a per-customer level.
What investors want to see:
LTV:CAC ratio of 3:1 or higher
CAC payback period of 12 months or less
Clear understanding of how you acquire customers and what they're worth
How to calculate:
CAC (Customer Acquisition Cost) = Total sales & marketing spend / Number of customers acquired
LTV (Lifetime Value) = Average revenue per customer x Gross margin % x Average customer lifetime
For subscriptions: LTV = ARPU x Gross margin % / Monthly churn rate
Example: If you spend ₹3 lakhs on marketing in a month and acquire 25 customers, your CAC is ₹12,000. If each customer pays ₹2,000/month, has 70% gross margin, and stays for 18 months on average, your LTV is ₹2,000 x 70% x 18 = ₹25,200. LTV:CAC = 2.1:1 (needs improvement).
What to present: Show the calculation clearly with assumptions documented. Break down CAC by acquisition channel if possible (organic, paid ads, referrals).
Common mistakes:
Not including founder time in CAC (seed-stage founders spend 50% of time on sales)
Calculating LTV based on aspirational retention, not actual data
Ignoring gross margin in LTV calculation
Gross margin shows whether your business model has strong economics or if you're just moving money around.
What investors want to see:
SaaS: 70-85% gross margin
E-commerce/D2C: 40-60% gross margin
Marketplace: 20-40% take rate (equivalent to gross margin)
How to calculate:
Gross margin % = (Revenue - Cost of Goods Sold) / Revenue
COGS includes: product costs, delivery/fulfillment, payment processing fees, hosting (for SaaS)
COGS does NOT include: marketing, salaries, rent, general overhead
Example: If you generate ₹10 lakhs in revenue, spend ₹2 lakhs on product fulfillment and delivery, and ₹50,000 on payment processing, your gross margin is (₹10L - ₹2.5L) / ₹10L = 75%.
What to present: Show gross margin trend over time. If it's improving, highlight that (shows operational leverage). If it's stable, show it's sustainable.
Retention tells investors whether customers love your product or are churning quickly.
What investors want to see:
B2B SaaS: >90% monthly retention (or
B2C subscription: >80% monthly retention
Improving retention over time (shows product-market fit strengthening)
How to calculate:
Monthly retention = Customers at end of month (excluding new) / Customers at start of month
Cohort retention = Track each monthly cohort's retention over 6-12 months
What to present: Show a cohort retention chart. This is powerful because it shows whether newer cohorts retain better than older cohorts (a sign you're improving product-market fit).
Red flag: If 40% of customers churn in first 3 months, you don't have product-market fit yet. Fix that before raising.
Investors want to see you've thought through how the business will scale.
What investors want to see:
3-year revenue, expense, and cash flow projections
Assumptions clearly documented (growth rate, pricing, conversion rates, etc.)
Scenario analysis: best case, base case, worst case
Clear milestones tied to capital raise (what you'll achieve with their money)
What to include:
Revenue model: How many customers, at what price, with what conversion rates
Cost model: Headcount plan, marketing budget tied to CAC targets, overhead scaling
Key milestones: Product launches, market expansion, team hires
Fundraising plan: How much you're raising now, when you'll need to raise next, at what valuation
Common mistakes:
Hockey stick projections with no justification ("we'll grow 10x next year because we're awesome")
Expenses that don't scale with revenue ("we'll 5x revenue with same team")
No scenario planning (what if growth is 30% slower than expected?)
If you're talking to experienced seed investors or early-stage VCs, they may dig deeper into these metrics:
Formula: (This quarter ARR growth x 4) / Last quarter sales & marketing spend
Target: >0.75 (for every ₹1 spent on S&M, you generate ₹0.75+ in new ARR)
Formula: Revenue growth rate % + EBITDA margin %
Target: >40 (shows balance between growth and profitability)
Example: If you're growing 60% and burning 25% EBITDA margin, your Rule of 40 score is 35 (acceptable for seed stage)
Measures revenue retention including expansions and upsells
Target: >100% (means existing customers are spending more over time)
Only relevant if you have expansion revenue (upsells, cross-sells)
Formula: (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)
Target: >4 (means you're adding revenue 4x faster than you're losing it)
Don't waste time on these unless specifically asked:
Profitability: Seed investors expect you to be burning cash to grow. They care about path to profitability, not current profitability.
EBITDA: Too early to focus on this. Growth trumps profitability at seed stage.
Balance sheet items: Investors care about P&L and cash flow, not balance sheet details.
Detailed tax optimization: Compliance matters, but tax strategy is not a focus at seed stage.
Slide 1 (Traction): MRR/GMV chart showing growth over 6-12 months
Slide 2 (Unit Economics): CAC, LTV, LTV:CAC ratio, payback period
Slide 3 (The Ask): How much you're raising, current runway, use of funds
Provide detailed financial model (Excel) with all assumptions documented
Cohort analysis showing customer retention by monthly cohorts
P&L by month for past 12-24 months
Cap table showing current ownership structure
"We're pre-revenue, so we don't have projections." Wrong. Every founder should have a hypothesis for how the business will scale. Document it.
"We have 50,000 app downloads!" Investors don't care about downloads. They care about paying customers and revenue.
"We're profitable!" (Because customer paid upfront for annual subscription) vs actual profitability when revenue is recognized properly. Know the difference.
If you built the financial model yourself, you should be able to explain every assumption. If your CFO/accountant built it and you don't understand it, that's a red flag.
"We'll grow 50% month-over-month for the next 24 months." That's 1,100x growth in 2 years. Be realistic. Investors will discount aggressive projections heavily.
Before you start pitching investors, make sure you have:
[ ] 12 months of revenue data (MRR/GMV chart)
[ ] Clear CAC and LTV calculations with documented assumptions
[ ] Gross margin calculated correctly
[ ] Cohort retention analysis (at least 6 cohorts)
[ ] Monthly burn rate and runway calculation
[ ] 3-year financial model with scenarios
[ ] Clean P&L for past 12 months
[ ] Updated cap table with all equity grants documented
If you can't check off at least 7 of these 8 items, you're not ready to pitch sophisticated investors.
At Easeupnow, we specialize in getting startups investor-ready. Our "Fundraising Metrics Package" includes:
Building your financial model with investor-grade projections
Calculating unit economics (CAC, LTV, payback period) from your data
Creating cohort retention analysis
Preparing financial deck slides for pitch deck
Conducting mock investor Q&A to prepare you for due diligence
We've helped 30+ startups raise seed funding, with an average round size of ₹3.5 Cr.
Book a free financial readiness assessment to see if your metrics are investor-ready.
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