Tomasz Tunguz Finance Metrics

Tomasz Tunguz, Venture Capitalist at Repoint Ventures, has 10 metrics he values most when combing through a startup’s model.You can read the original post here.

Start Tracking Tomasz’ Metrics Now

"Financial statements are a Rosetta Stone for startups. They reveal the strategies and the tactics of how to bring a product to market."

Tomasz Tunguz - Redpoint Ventures

Revenue Growth

How quickly a company can grow under their current conditions. Indicates the potential of a business.

Net Income

The bottom line or burn rate. Dictates the minimum amount a company needs to raise to become profitable.

Contribution Margin

Profit per unit without fixed costs. You can calculate the Contribution Margin by taking the revenue from one unit and subtracting the variable costs.

CAC Payback

A gauge for how aggressive a company can be marketing and selling its services. The longer the payback period, the greater the risk for churn.

Churn Rates

A way to quantify the revenue potential for each customer. Publicly traded SaaS companies average a ~3% churn rate.

Salary Expenses

The largest expense for most startups. An easy way to gauge salaries to market rates and employee retention.

Sales Quotas

Indicates how easily the product is sold and how well the sales team is run.

Gross Margin

A measure of how expensive it is to make a product. Calculated by taking revenue and subtracting COGS.

Non-Personnel Marketing Spend

The most significant controllable expense in a business. It typically includes ad spending and event spending.

Revenue per Employee

Revenue per employee is a measure of how efficient a business is in using technology to bring their product to market.