These Are The Most Important Metrics To Share With Investors If You Only Have A Handful Of Customers

#PEIntensive16, food startup, funding, PE Summit, venture capital

Anarghya Vardhana is Principle at Maveron, an early-stage venture firm investing in breakout consumer brands, and Christine Moseley is Founder and CEO of Full Harvest, a platform that sells farmers’ imperfect produce to food and beverage companies, thus reducing food waste and providing farmers with additional income (Christine is also a 2017 Unilever Young Entrepreneur Award winner, and a winner of the first Project Entrepreneur Venture Competition in 2016). Together Anarghya and Christine shared their insights into how to determine what are the right metrics for your company and what metrics to share with potential investors at the 2017 PE Summit in San Francisco.

When pitching to VCs, it is imperative that you tell a compelling brand story. What makes a story even more compelling for a VC is when it is accompanied by your company’s metrics. But what are the right metrics to share with a potential investor? And what should you do if you don’t yet have any real traction?

Anarghya Vardhana is Principle at Maveron, an early-stage venture firm investing in consumer-focused brands, and she had this to say about choosing the right metrics: “There are a whole host of [metrics], and depending on whether you’re an enterprise company or a consumer company, they could be different.” Anarghya says that it’s important to share whatever metrics you do have and use that to supplement your big vision for your company. “Some initial things to start off with [are] if you have revenue, talk about the revenue. If you have a number of users and maybe not revenue, then talk about the number of users.”

For Anarghya, it’s more important that founders can prove that their first customers, no matter how few, are also very committed to the product or service. “One thing we care really deeply about at the seed and even Series A stages is not necessarily how big is that number, in terms of revenue or users, but how deep your customer’s going. Do they keep coming back? Do they love your product or service? How engaged are they?”

According to Anarghya, there are lots of ways to demonstrate that you have a “deep” commitment from your customers. And “We don’t want growth for the sake of growth. Yes, you can throw a lot of money on Facebook or Instagram or some other type of acquisition channel and really jack up that number, but if your customers don’t actually love you and they don’t keep coming back and they don’t tell other ten other people [about you], then that’s a tough path to growth, so show that engagement and show that love [from your customers].”

So how can female founders demonstrate that their customers actually love what they are building?

  • Track your customers and use tags to know when they become repeat customers (and how often). It’s good if you can show an investor that your current customers, no matter how few, keep on coming back for your product and/or service.

  • Show an increase in Average Order Value. “Let’s say the first two months [your customers] spend $100, and they come back and spend $300 and that number keeps growing—that’s a great way to show [average order value],” says Anarghya.

  • Include metrics on customer referrals. Share when one customer ends up referring three or four other friends to your company (and whether those friends make a purchase as a result).

  • You can also use social media analysis (e.g. user-generated content) to demonstrate how much your customers love and are talking about your product.  Or shoot video of your customers loving your product [or] services and share that with investors as you pitch (this was a tactic that Rent the Runway Co-Founders Jenn Hyman and Jenny Fleiss used in the early days of pitching investors, before they had more tangible metrics).

For female founders who don’t have a ton of metrics, or are still in the ideation stage of their company, Christine believes confidently sharing your personal story can help you get investors’ attention. “Once you start putting one foot in front of the other, [fundraising] really is about selling yourself and being confident in yourself and your vision,” says Christine. “I always start off every pitch with my personal story [and] what was that moment of truth. You have to show that passion and that grit and really tell a big story.”

When Christine started fundraising, she didn’t have much to share with investors in terms of metrics, but she was sure to leverage the data she did have to share her big vision for Full Harvest. “I didn’t know what metrics [investors] were going to look for, [but] I knew they wanted product-market fit, customers and revenue. I had a Minimum Viable Product (MVP), a working platform that was taking orders, and I had a few farms and a few customers—that’s it. But I had [a couple months] of actual revenue coming in. I could show that we had zero churn, I could show that [customers] were ecstatic about what we were doing [and] super excited.” For investors, Christine says her ability to demonstrate customer loyalty was what sold them on her idea. “The actual sales numbers were minimal. It was just showing that the platform worked, the farmers were changing the way they harvested, and people wanted it.”

Female founders especially should focus on sharing their big vision with investors as they pitch. It’s one of the biggest differences Anarghya sees between female founders and the male founders who pitch her. “A lot of times women founders are building business for women customers, but oftentimes the [investors] around the table may not look like the woman founder, and they may not understand the point. To prevent that, come prepared: show the video, show the numbers, show the total addressable market (how many people can use this), [and show] what your customers are saying about you.”

Anarghya adds, “Remember, it’s fair to say to [a male investor], “I understand that the few women in your life may not use this, but respectfully, they’re not our target market. [But] let me show you the evidence of the number of other people that will use it.”


Photo credit: Amanda Gentile/ADG Photography


Anarghya’s and Christine’s advice comes from their San Francisco #PESummit17 workshop, “Metrics That Matter.” Listen to the entire workshop on episode 55 of our podcast, and subscribe on iTunes, Google Play or SoundCloud.