Quantitative measures used to evaluate fund and company performance — IRR, MOIC, TVPI, DPI, ARR, and other KPIs.
155 terms
Annual Recurring Revenue — the annualized value of a company's subscription or contract revenue. The primary revenue metric for SaaS and subscription businesses, used to benchmark growth, valuation, and fundraising.
A valuation metric expressing a company's enterprise value as a multiple of its Annual Recurring Revenue — the primary valuation benchmark for high-growth SaaS businesses.
Excess returns generated above a benchmark, attributed to skill rather than market conditions.
Returns above what would be expected from the market or a benchmark, attributable to a manager's skill rather than market conditions.
The average annual revenue generated per customer contract, commonly used in SaaS businesses.
In SaaS, the total value of contracted but not yet recognized revenue — a leading indicator of future ARR growth.
A financial statement showing a company's assets, liabilities, and shareholders' equity at a specific point in time.
One hundredth of a percentage point (0.01%), used to express small differences in rates, fees, or returns.
The risk that a hedging instrument does not perfectly offset the exposure it was designed to mitigate.
The percentage of a VC's investments that generate positive returns, as opposed to partial or total losses.
A performance standard used to evaluate a fund's returns — typically the median or top-quartile IRR among peer funds of the same vintage year.
The systematic distortion in VC performance benchmarks caused by survivorship bias, selection bias, and reporting delays.
The carrying value of a portfolio investment on a fund's books — usually the last round valuation or a write-down if performance has deteriorated.
The implied value of a self-funded company based on its revenue, profitability, or comparable transactions rather than a priced funding round.
The moment when a company's revenue equals its costs, requiring no additional external funding to sustain operations.
A valuation approach that calculates required return by adding risk premiums for each layer of investment risk.
Net burn divided by net new ARR — a measure of how efficiently a company is converting cash spending into revenue growth. The lower the burn multiple, the more capital-efficient the growth.
The rate at which a company spends its cash reserves, typically expressed as a monthly figure. Gross burn is total monthly cash outflow; net burn subtracts revenue collected.
Customer Acquisition Cost — the total cost to acquire one new customer, including sales and marketing expenses. A core unit economics metric that determines whether a business model is economically viable at scale.
The number of months required to recover the cost of acquiring a customer from the gross profit that customer generates — a core measure of go-to-market efficiency.
A periodic report provided to each LP showing their individual fund position including contributions, distributions, share of gains/losses, management fees, and current NAV.
The ratio of revenue or value generated per dollar of capital raised — a measure of how productively a company converts investment into growth.
The ratio of revenue generated to total capital raised, measuring how effectively a startup converts investment into growth.
The rate at which customers cancel or fail to renew their subscriptions over a given period, expressed as a percentage of total customers or revenue.
The percentage of customers or revenue lost over a given period, a critical indicator of product-market fit.
Tracking the behavior of a specific group of customers (cohort) acquired in the same period over time — the gold standard for measuring retention.
A valuation method that estimates a company's value based on the trading multiples of similar public or recently acquired companies.
The total cost of acquiring a new customer, including all sales and marketing expenses.
The number of months it takes for the gross profit from a new customer to repay the cost of acquiring that customer.
The risk created when a large percentage of revenue comes from a small number of customers.
The ratio between lifetime value (LTV) and customer acquisition cost (CAC), commonly used to evaluate SaaS business health.
The degree to which customers continue using a product due to habit, switching costs, or embedded workflows.
Distributions to Paid-In Capital — the ratio of cash actually returned to LPs divided by the capital they invested. The only VC performance metric based on realized, distributed cash.
Distributions to Paid-In — the ratio of cash actually returned to LPs versus capital contributed, measuring realized (not paper) returns.
A company that would reach profitability on its current trajectory before running out of cash — without needing to raise additional capital.
A company that will run out of cash before reaching profitability if it maintains its current trajectory — the opposite of default alive.
The percentage of LPs who fail to meet capital calls, or the percentage of venture debt borrowers who default on their obligations.
The rate at which a fund invests its committed capital over the investment period, measured as the percentage of capital deployed per quarter or year.
The ratio of cash and securities actually distributed to LPs relative to their total contributed capital, measuring realized (not paper) returns.
Earnings Before Interest, Taxes, Depreciation, and Amortization — a proxy for operating cash flow and profitability, especially relevant for growth equity and PE deals.
A valuation metric expressing a company's value as a multiple of its EBITDA — commonly used in growth equity and private equity but less in early-stage VC.
A quantitative rating assessing how thoroughly environmental, social, and governance factors are incorporated into a fund's or company's investment process and operations.
A profitability metric that shows operating earnings before accounting for financing costs and taxes.
The degree to which reported earnings reflect sustainable, recurring business performance rather than one-time events.
The longer, more complex sales process typically required to close deals with large organizations.
The total value of a company including equity and net debt — a more complete measure of company value than market cap alone.
A company's total value including equity, debt, and cash — a more comprehensive measure than market capitalization alone.
A valuation multiple that compares a company's total enterprise value to its annual revenue, commonly used to benchmark SaaS and tech companies.
The ratio of exit value relative to the invested capital.
Additional recurring revenue generated from existing customers through upgrades or expanded usage.
Additional recurring revenue generated from existing customers through upsells, cross-sells, seat additions, or usage growth — a key driver of net revenue retention above 100%.
The estimated market value of an investment, used by VC funds to mark portfolio companies on their books between financing events.
Cash generated by a business after accounting for capital expenditures — a measure of true financial health and the basis for many valuation models.
Revenue recognized according to Generally Accepted Accounting Principles, which may differ significantly from bookings or cash received.
The difference between standardized accounting principles (GAAP) and company-adjusted metrics that exclude certain items for a 'cleaner' view of performance.
Gross Revenue Retention — the percentage of recurring revenue retained from existing customers over a period, excluding expansion revenue. Unlike NRR, GRR can never exceed 100%.
The percentage of a fund's portfolio companies that successfully raise the next round of financing, indicating deal quality and portfolio momentum.
The total amount of cash a company spends each month across all operating expenses, before any revenue is subtracted.
Revenue minus cost of goods sold (COGS), expressed as a percentage — a fundamental measure of how much value a business retains from each dollar of revenue after direct costs.
The percentage of recurring revenue retained from existing customers over a period, excluding any expansion revenue from upsells — measures pure churn.
Total Value to Paid-In capital before deducting management fees and carried interest, showing the fund's raw investment performance multiplier.
The point where revenue or user growth accelerates significantly.
Extremely rapid startup growth, often defined as 100%+ annual revenue expansion.
A standardized catalog of impact performance metrics maintained by the GIIN, used by impact investors to measure and compare social and environmental outcomes across investments.
Internal Rate of Return — the annualized rate of return on a portfolio or investment, accounting for the timing of cash flows. The primary time-weighted performance metric used by VC funds.
The systematic process of collecting, analyzing, and reporting data on the social and environmental outcomes generated by impact investments, using standardized frameworks and metrics.
A structured system for quantifying and reporting the social or environmental impact of investments alongside financial returns.
A company's inferred value based on the price paid for a portion of its equity, which may differ from its actual enterprise or intrinsic value.
A calculated or inferred value for a company or asset based on comparable transactions, multiples, or other indirect methods rather than a direct market price.
A moment when a company's growth trajectory accelerates significantly due to product-market fit or scaling.
The annualized return rate that makes the net present value of all cash flows equal to zero — the standard VC performance metric.
The pattern where venture fund returns initially show negative performance due to management fees and unrealized investments, before turning positive as portfolio companies mature and exit.
A reporting tool summarizing the most important performance indicators for a company.
A measurable metric that tracks progress toward a critical business objective.
The percentage of startups in a portfolio that fail or return less than invested capital.
Lifetime Value — the total revenue a business expects to earn from a single customer over the entire duration of their relationship.
The total revenue a business expects to earn from a customer over the entire duration of the relationship.
Multiple on Invested Capital — the total return on an investment expressed as a multiple of the original capital deployed. A 3x MOIC means you received $3 for every $1 invested.
Multiple on Invested Capital — the total value returned divided by the total capital invested, expressed as a multiple (e.g., 3x means tripling your money).
Monthly Recurring Revenue — the total predictable subscription revenue a company earns each month. The month-by-month building block of ARR and the most closely tracked revenue metric for early-stage SaaS.
A SaaS efficiency metric measuring how much ARR growth is generated per dollar of sales and marketing spend — above 0.75 is generally considered efficient.
Adjusting the carrying value of portfolio investments to reflect current market prices or estimated fair values.
The total market value of a company's outstanding shares, calculated as share price multiplied by total shares.
The percentage of a total market currently captured by a company.
The process of quantifying the revenue opportunity for a product using TAM, SAM, and SOM frameworks.
The early signals that indicate product-market fit may be emerging.
The number of paying or engaged customers in a given month.
The process of determining a venture fund's Net Asset Value by valuing all portfolio holdings, adding cash, and subtracting liabilities and accrued fees.
Net Dollar Retention (also Net Revenue Retention or NRR) — the percentage of recurring revenue retained from existing customers over a period, including expansions and contractions.
Net Revenue Retention — the percentage of recurring revenue retained from existing customers over a period, including expansions and contractions. Same concept as NDR (Net Dollar Retention).
The actual monthly cash loss after subtracting revenue from total operating expenses — the real rate at which a company is depleting its cash reserves.
The percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn. Above 100% means existing customers are growing.
The percentage of recurring revenue retained from existing customers over a period, including expansion and contraction.
The percentage of revenue retained from existing customers year-over-year, including upsells and expansions. NRR above 100% means existing customers are growing.
Total Value to Paid-In capital after deducting all management fees, carried interest, and expenses—the actual return multiple that LPs receive.
The degree to which a company can increase revenue without proportionally increasing costs, driving margin expansion at scale.
Revenue minus operating expenses expressed as a percentage of revenue.
Revenue or user growth achieved without acquisitions or paid marketing.
Performance exceeding benchmark returns.
The time required for a company to recover its Customer Acquisition Cost (CAC) from the gross margin generated by that customer.
A measure of how efficiently a company recovers sales and marketing spend.
In sales: the total value of potential deals in progress. In VC fundraising: the pool of potential investors a startup is engaging.
The percentage of potential deals that convert into paying customers.
The mathematical phenomenon in venture capital where a tiny fraction of investments generate the vast majority of total fund returns, making individual outliers more important than portfolio averages.
Highly engaged users who derive significant value from a product and often influence others to adopt it.
How strongly customer demand changes when pricing changes.
A valuation metric comparing a company's market value to its revenue, commonly used to evaluate SaaS company valuations.
The likelihood that customers continue using a product due to habit or switching costs.
The speed at which a product team ships features, improvements, and iterations.
A benchmarking methodology that compares venture fund returns to what the same cash flows would have generated if invested in a public market index like the S&P 500.
A methodology for comparing VC fund returns against what the same capital would have earned in public markets.
A SaaS growth efficiency metric comparing new and expansion revenue against churned and contracted revenue — above 4 is considered excellent for early-stage companies.
Residual Value to Paid-In — the unrealized (paper) value of a fund's remaining portfolio relative to capital contributed. RVPI = TVPI minus DPI.
The time it takes for a new sales rep, product, or market to reach full productivity.
The percentage of customers who continue using a product over time.
When a large share of revenue comes from a few customers.
The growth rate of revenue generated from existing customers.
A valuation metric expressing company value as a multiple of revenue — used when EBITDA multiples aren't applicable because the company is pre-profit or early-stage.
The reliability of future revenue projections.
The predictability of future revenue based on contracts or subscription models.
Return on investment measured relative to the risk taken — a 3x return in venture capital represents a different risk-adjusted return than a 3x return in bonds.
A SaaS health metric: a company's revenue growth rate plus profit margin should equal or exceed 40%, balancing growth and profitability.
A SaaS benchmark where a company's revenue growth rate plus profit margin should exceed 40%. Companies above 40% are considered well-balanced between growth and profitability.
Projected annual revenue based on current monthly or quarterly performance.
The number of months a company can continue operating at its current burn rate before running out of cash. One of the most critical metrics for managing fundraising timing and operational survival.
The formula for determining how many months a startup can operate before running out of cash: cash balance divided by monthly burn rate.
The standard set of KPIs used to evaluate software-as-a-service business performance.
A measure of how much revenue a company generates relative to its sales and marketing spend — often tracked as the Magic Number or CAC Payback Period.
The valuation premium investors assign to companies that have demonstrated the ability to grow efficiently at increasing scale.
When a portfolio company's valuation is based on an outdated funding round that no longer reflects current fair value.
Total Value to Paid-In Capital — the sum of all distributions made and remaining portfolio value, divided by invested capital. The all-in performance multiple combining realized and unrealized returns.
Total Value to Paid-In — the sum of distributions plus remaining portfolio value, divided by capital contributed. Includes both realized and unrealized returns.
The estimated value of a business beyond the explicit forecast period, often the largest component of a DCF valuation.
An integrated financial model linking the income statement, balance sheet, and cash flow statement.
The speed at which a product moves from concept to commercial launch.
Funds whose returns rank in the top 25% of all funds from the same vintage year.
The total revenue opportunity available if a product achieved 100% market share.
The total revenue value of a customer contract including recurring and one-time charges.
A fund performance metric that measures total value (distributions plus remaining NAV) relative to total capital contributed by LPs.
Measurable evidence that a startup's product is gaining market adoption — revenue growth, user growth, retention, and engagement are common traction metrics.
The direct revenues and costs associated with a single customer or unit — used to assess whether a business can be profitable at scale.
The paper profit on investments that haven't been sold or exited yet.
The cost required to acquire a new user, commonly used in consumer tech.
A measurement of how frequently and deeply users interact with a product.
The percentage of users who continue using a product over time.
The analytical frameworks used to determine a company's worth, including DCF, comparable analysis, and precedent transactions.
Weighted Average Cost of Capital — the blended cost of a company's debt and equity financing.
A large customer that contributes a disproportionately large share of revenue.
The difference between a company's current assets and current liabilities.
A reduction in the carrying value of a portfolio investment — typically reflecting poor company performance or a down round financing.
A total write-down of a portfolio investment to zero — when a company has failed and the investment is a complete loss.
An increase in the carrying value of a portfolio investment on a fund's books, typically triggered when the company raises a new financing round at a higher valuation.
A comparison of revenue or other metrics between the same period across two years.
A measure comparing the expected return from an investment relative to its risk.
Growth driven entirely by organic or viral adoption rather than paid marketing.