What Metrics Do VCs Care About at Seed Stage?

Seed VCs focus on revenue growth (MRR/ARR), user engagement, retention rates, and early unit economics.

They want to see $10K–$100K+ MRR, month-over-month growth of 15–20%+, strong retention (net revenue retention above 100% for B2B), and reasonable customer acquisition costs. Unlike pre-seed, seed investors expect real data proving customers want your product, not just a vision.

Why Metrics Matter at Seed

Pre-seed investors bet on potential. Seed investors bet on evidence.

By seed stage, you should have a working product and real customers. Investors use metrics to answer one fundamental question: Is this startup finding product-market fit?

Strong metrics don't guarantee funding, but weak metrics almost always guarantee rejection. Here's what seed VCs actually measure.

The Core Metrics Seed VCs Evaluate

1. Revenue Metrics

Revenue is the clearest signal that customers value your product enough to pay.

Monthly Recurring Revenue (MRR). For SaaS and subscription businesses, MRR is the baseline metric. Seed-stage expectations typically range from $10K–$100K MRR, though this varies by sector and business model.

Annual Recurring Revenue (ARR). Simply MRR × 12. Investors often discuss ARR for easier comparisons across companies.

Revenue growth rate. More important than absolute revenue is the trajectory. Seed VCs look for 15–20%+ month-over-month growth. Consistent growth signals you're solving a real problem and can scale.

Revenue quality. Is revenue from many small customers or a few large ones? Diversified revenue is generally healthier than concentration risk.

2. User and Engagement Metrics

For consumer products or pre-revenue startups, engagement metrics substitute for revenue:

Active users (DAU/MAU). How many people use your product daily or monthly? DAU/MAU ratios above 20% indicate strong stickiness.

Session frequency and duration. How often do users return and how long do they stay? These metrics reveal whether you're building a habit.

3. Retention Metrics

Retention separates real traction from vanity metrics. Growth without retention is a leaky bucket.

Cohort retention. What percentage of users from Month 1 are still active in Month 3, 6, or 12? Healthy cohort curves flatten rather than dropping to zero.

Net Revenue Retention (NRR). For B2B SaaS, NRR measures whether existing customers spend more over time. NRR above 100% means expansion exceeds churn, a powerful signal. Top seed-stage companies show 100–120%+ NRR.

Churn rate. What percentage of customers cancel each month? Monthly churn above 5% is a red flag that compounds into serious problems.

4. Unit Economics

Even at seed, investors want early signals that your business model works:

Customer Acquisition Cost (CAC). How much do you spend to acquire one customer? This includes marketing, sales, and related costs.

Lifetime Value (LTV). How much revenue does a customer generate over their entire relationship with you?

LTV:CAC ratio. The relationship between these metrics matters most. Ratios of 3:1 or higher suggest a scalable business. Below 3:1, you may be spending too much to acquire customers who don't stay long enough.

Payback period. How many months until you recover CAC? Under 12 months is typically acceptable at seed.

For deeper insight into how VCs evaluate these metrics during their decision process, read our guide on understanding VC decision-making timelines.

5. Growth Efficiency

Investors increasingly focus on capital efficiency:

Burn multiple. How much are you burning to generate each dollar of new ARR? A burn multiple under 2x is strong at seed.

Runway. How many months until you run out of cash? Seed investors want to see 12–18 months of runway post-raise.

What Seed VCs Care Less About

At seed stage, certain metrics matter less: profitability (not expected), gross margin precision (directionally correct is fine), and perfect data infrastructure (approximate metrics beat no metrics). Focus on metrics that demonstrate product-market fit momentum.

How to Find Seed Investors Who Match Your Metrics

Different investors have different thresholds. Some seed VCs invest at $20K MRR; others want $100K+. Targeting investors whose expectations match your current metrics dramatically improves conversion rates.

SheetVenture helps founders filter investors by stage, sector, and recent investment activity, so you pitch to VCs who fund companies at your current traction level.

The Bottom Line

Seed VCs evaluate metrics to assess product-market fit progress. Revenue growth, retention, and early unit economics tell the story of whether your startup is working. Strong metrics won't guarantee a term sheet, but they get you in the room.

Have questions about which metrics matter for your specific raise? Talk to our team.

SheetVenture helps founders find seed investors actively backing companies at their traction level, so every pitch is relevant.