How Do Investors Evaluate If Startups Are Progressing Fast Enough?
Investors measure progress through growth rate, milestone velocity, and burn efficiency. Learn the five benchmarks VCs use to evaluate speed.
Investors evaluate startup progress through five benchmarks: revenue growth rate (15-20% MoM for early stage), milestone achievement velocity, burn multiple efficiency, competitive position advancement, and team scaling capability.
"Fast enough" is relative to stage, market, and capital deployed. VCs compare your trajectory against similar companies at similar stages. Progress that seems good in isolation may be slow compared to top performers in your category. The core question: "Is this company on track to reach the next fundable milestone before running out of runway?"
Why Progress Speed Matters
Investor expectations are calibrated to venture returns:
The math driving expectations:
VCs need 10x+ returns on winners
Winners must grow fast to reach venture scale
Slow growth = unlikely to achieve required returns
Capital is time-limited (fund lifecycles of 10 years)
What slow progress signals:
Weak product-market fit
Execution challenges
Market timing issues
Team capability concerns
For context on momentum signals, understand how investors interpret momentum during fundraising.
Progress Benchmarks by Stage
Stage | Revenue Benchmark | Key Progress Metrics | Timeline Expectation |
|---|---|---|---|
Pre-seed | Pre-revenue acceptable | MVP shipped, early users, validation signals | 6-12 months to seed milestones |
Seed | $0-$500K ARR | 10-15% MoM growth, first paying customers | 12-18 months to Series A |
Series A | $1-3M ARR | 15-20% MoM growth, repeatable sales | 18-24 months to Series B |
Series B | $5-15M ARR | 10-15% MoM growth, scaling operations | 18-24 months to Series C |
Benchmarks vary by sector, B2B SaaS differs from consumer or marketplace models.
The Five Progress Evaluation Factors
1. Revenue Growth Rate
The primary velocity indicator:
Strong signals: 15-20% month-over-month at seed/Series A, consistent growth without major dips, acceleration over time.
Concerning signals: Single-digit MoM growth, declining growth rates, lumpy revenue with no pattern.
What investors calculate: "At this rate, when do they hit $10M, $50M, $100M ARR?"
2. Milestone Achievement Velocity
Are you hitting targets on schedule?
Strong signals: Consistently meeting or exceeding stated goals, clear milestone progression, deadlines hit.
Concerning signals: Repeatedly missing targets, shifting goalposts, vague milestone definitions.
Investor thinking: "If they can't hit milestones now, why would that change at scale?"
3. Burn Multiple Efficiency
How efficiently are you converting capital to growth?
Calculation: Net burn ÷ net new ARR
Strong signals: Burn multiple under 2x (adding $1 ARR for every $2 burned), improving efficiency over time.
Concerning signals: Burn multiple above 3x, worsening efficiency, no path to improvement.
What it reveals: Whether growth is sustainable or just bought with capital.
Explore growth strategies that balance speed with efficiency.
4. Competitive Position Advancement
Are you gaining or losing ground?
Strong signals: Market share increasing, winning competitive deals, talent choosing you over competitors.
Concerning signals: Losing deals to competitors, talent defecting, market share stagnant.
Context matters: Fast absolute growth means less if competitors grow faster.
5. Team Scaling Capability
Can you grow the organization?
Strong signals: Key hires landing, culture maintained during growth, systems scaling effectively.
Concerning signals: Critical roles unfilled for months, high turnover, operational chaos.
Why it matters: Company growth requires organization growth. Slow hiring = slow scaling.
How Investors Compare Progress
VCs don't evaluate in isolation:
Comparison frameworks: Portfolio benchmarks at same stage, public data on similar trajectories, pattern recognition from investments.
What they ask:
"Top-quartile, median, or bottom-quartile growth?"
"Would other investors see this as strong?"
Red Flags That Signal "Too Slow"
Automatic concerns: 18+ months post-funding without progress, declining growth rate, milestones missed by 50%+, burn unchanged while growth stalls, no new customers in 3+ months.
Investor response: These patterns trigger difficult conversations about strategy, team, or runway.
How to Demonstrate Strong Progress
Track metrics. Know your MoM growth, burn multiple, milestone velocity. Benchmark yourself. Compare to stage-appropriate peers. Show trajectory. Demonstrate improvement over time. Update proactively. Regular updates build confidence.
Check SheetVenture to benchmark progress against comparable companies.
When "Slower" Is Acceptable
Context can justify different timelines:
Deep tech: Longer R&D cycles expected
Regulated industries: Compliance timelines built in
Enterprise sales: Longer cycles, larger deals
Capital efficiency: Slower but profitable growth
Use SheetVenture's intelligence to find investors whose timelines match your market.
The Bottom Line
Investors evaluate progress through revenue growth (15–20% MoM at early stages), milestone velocity, burn efficiency (under 2x multiple), competitive advancement, and team scaling. "Fast enough" means on track to hit next fundable milestones before runway ends. VCs compare your trajectory to similar companies, top-quartile progress gets funded, bottom-quartile triggers concern. Track your benchmarks, contextualize your growth, and demonstrate consistent forward momentum.
Progress is relative. Know your benchmarks and beat them.
SheetVenture helps founders benchmark progress, so you know where you stand before investors tell you.