0/ There is a dazzling amount of inconsistency in what GTM (go-to-market) metrics are presented at board meetings of early stage B2B (business to business) companies. Here is my hit list of the most important, and why:

1/ CARR – Total contracted annual recurring revenue is the single best metric for the health of a business. It encapsulates new logo growth, expansion, and churn in a single number. If you only show one number, use this one.

2/ Live ARR – Some board members prefer LARR to CARR because it can take a long time to implement a deal. And some never make it. Both str best, but for early stage companies, I prefer CARR as it signals the market.

3/ Net New ARR – Includes $ from new logos booked and expansion net of churn and downsells. This is the best leading indicator of market pull.

4/ Net Dollar Retention – Lately the economics of B2B companies are more driven by expansion than up front ACV (annual contract value). This is the best indicator of that motion. Remember it is net of churn and downsells.

5/ Gross Dollar Retention – Gross retention reflects your churn and downsell and is often an indicator of how mission critical your product is.

6/ Net New Logos – As my buddy @devdutt says, “new logos are oxygen.” They’re the foundation you’ll have to expand in the future.

7/ New Logo ACV – Tracking annual contract value of new logos and % growth over time helps you manage your GTM strategy. This is particularly important if you’re trying to move upmarket.

8/ CAC Payback – If you have a couple quarters of sales data, measuring CAC (customer acquisition costs) payback gives you a read on sales efficiency. The typical calculation is (sales + marketing) / (net new ARR x % gross margins). The average startup has a CAC payback of 12-18 mos. If you sell to large enterprises, 18-24 mos; and SMBs, 6-12 mos.

9/ Quota Attainment – What percent of reps hit quota? This generally sits between 70-100% (if it’s >100%, you need higher quotas). This is the anchor number for knowing whether to scale sales. Quota should be at least 3x OTE (on target earnings), hopefully more, for this to be meaningful.

10/ Net Burn – Early sales really takes an entire company, so I’d rather see total burn than trying to break out GTM unit economics. Ultimately, I like to look at cumulative burn and compare it to how many dollars it’s generated

11/ Net New Weighted Pipeline – Pipeline generated in the previous period less pipeline removed (sold or lost) is a good indicator of market pull, and a leading indicator for scaling sales. Generally a bogus number early on, but good discipline to be in the habit of reporting.

12/ Some of these only really become relevant after a few years of selling. But presenting them early on creates a common framework to center board discussions. And there is a lot of value in that.

Many thanks to @peter_lauten, @aleximm, @kshenster, and @sarahdingwang for their help with this Tweetstorm.

Want more a16z?

Sign up to get the best of a16z content, news, and investments.

Thanks for signing up for the a16z newsletter.

Check your inbox for a welcome note.

MANAGE MY SUBSCRIPTIONS By clicking the Subscribe button, you agree to the Privacy Policy.