Evaluating Startups: What Metrics Matter the Most?

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In the previous blog, we have discusses what are the “5 most important questions to ask your organization and yourself before going to bed with startups?” Now that you are ready to dive into the startup world, let’s review the essential metrics for startup evaluation to determine how suitable the case is for your needs and how likely it is to survive long-term.

It is important to understand that the company evaluation for early-stage startups and more advanced growth companies (aka scale-ups) can and will differ. The younger (the more early-stage) the company is, the more essential it is to remain focused on finding the first paying customers as soon as possible to find and prove the product-market-fit. Wherein growth companies fight for the firm position on a market space comparing to its competitors, set a steady revenue stream, scale its operations, grow the team and attract new investment/partnership opportunities. Hence, identifying what stage company your corporate seeks for will then determine what metrics matter the most in startup evaluation.

Since Catapult’s services rely heavily on data, only more advanced growth companies are to be seen in the data-pool, and consequently to be validated for startup-corporate collaboration. Metrics presented below correspond to the needs of corporates to find and collaborate with more advanced cases.

What metrics matter the most when evaluating a startup from corporate perspective?



  • Investments & Investors

  • Turnover

  • Valuation estimations

  • Estimates of the runway with present funding



  • Descriptions of the product/service

  • Growth speed

  • Growth speed of the company compared to competitors

  • Presence in different medias weekly compared to competitors



  • Founders & their success with previous ventures

  • Team members & their background

  • Employees growth

  • Board members & Advisers


In the next blog posts, we’re going to dive deeper into each data-driven metric and understand how to comprehend data to make conclusions on startup evaluation.


Startup - English Dictionary

We have listed a few key concepts of startup jargon that you should know when doing business within the scene:


Aka an incubator. A facilitator that helps Startups grow their business at a faster rate through mentorship and space.

Accredited Investor

A natural person (as in a rich individual) with notable income that is interested in investing in a company. By law you should require them to prove that they can afford to risk their money.


A strategy for a bigger company to acquire talent from your team, also known as a signing bonus.


When a company buys the controlling stake in another company.


Paid content that is meant to look like a real blog post or an article. Readers are interested enough to not care that they’re being pitched.


A philosophy of software development that promotes incremental development and emphasizes adaptability and collaboration.

Angel Investor

A individual who provides a small amount of capital for a stake in the company. Typically precedes a Seed Round and usually happens when the company is in its’ early stages.


A process to measure a startup’s current success. For example measures a company’s growth by determining whether or not a startups has met certain goals, benchmarks i.e. recurring revenue.

Bleeding Edge

Refers to technology that’s been released but is still not ready for the public due to the fact that it hasn’t been tested reliably. In a ”beta” stage released to early adopters.


Using your personal or your family and friends’ money to get your business going, no external input.


Business to business. Your company sells services or products to other companies.


Business to consumer. Your company sells services or products to the consumers (the masses).

Bridge Loan

A short-term (2weeks to 3 years) loan to close the gap between major financing. Interest rates are relatively high for bridge loans. They’re used for working capital needs and planned to pay back when long-term financing is raised.


A general exit strategy. Purchasing of a company’s shares, that gives the buyer controlling interest in the company.

Burn Rate

Run rate. How fast you’re burning through your money. In the first several years startups usually lose large sums of money before breaking even.

Capped notes

Refers to a cap placed on investor notes in a funding round. All parties agree on a mutual cap on the valuation of the company where notes turn to equity.

Cashflow Positive

The amount of money coming in is more than the amount of money going out. (Doesn’t necessarily mean profit though) Someone pretty much gave you a dime.

Churn Rate

The percentage rate at which customers stop subscribing to a service or employees leave the job.


Usually applies to shares given to employees over time. It’s a way for the CEOs to fire employees or let them leave without giving them stocks within a time frame.

Cottage Business/Cottage Industry

A good but un-scalable business. Not particularly fit for investments due to this.


A pitch deck. A 10-slide power point presentation that covers all aspects of your business in a concise and compelling way.

Disruptive Technology

Something that completely changes the way society does something. Like Uber/taxis, internet shopping/ in-store shopping

Exit Strategy

How you sell your company and make your investors heaps of money.

FMA, First Mover Advantage

First position at a market. This has both pros and cons. You may have to educate the market as you go so sales you make will cost more than they would in a market with established demand.


The basic product of your company is free, but you upsell more advanced features to your customers.


When you add a game layer to your website or product experience that encourages people to use your site through rewards, people love games.

Growth Hacking

A marketing technique that focuses on finding scalable growth quickly, through non-traditional and inexpensive tactics such as social media.

Hockey Stick

You want your growth curve to resemble a hockey stick-like figure. This is the shape your VCs want to see and means your startup will have to double sales every year.

IP, intellectual property

Patents and other creations of the mind like inventions or new strips of coding.


Giving something a go, failing, then trying again in a slightly different way in order to achieve a better result


Starting/making your company, website etc. public.

Lead Investor

VC company or an individual investor that organizes a specific round of funding for a company. Usually invests the most capital in that round.

Lean Startup

The core mission of a lean startup is to prove the business concept as quickly and inexpensively as possible.


Using something (technology, partnership etc.) to your advantage.

Loss Leader Pricing

Selling something at a loss because you expect these customers to do business with you repeatedly.

Low Hanging Fruit

The easiest way for your startup to bring money through the door. Crucial for startup success.

Market Penetration

How much of your potential market you are capturing and at what rate. Important for VCs to know.


The way you make money or how you plan to make money.

MVP, Minimum Viable Product

This means the pilot phase of your product that you need to achieve proof of concept. Often used in the creation of software (beta- version)

Non-GAAP Profitable

Non-cash costs don’t count.This method doesn't post revenue and expenses based on the movement of cash. GAAP insists in the accrual method, because the financial statemens are a better indicator of the true earnings of a Company, if revenue and expenses aren't based on cash movements.  


Changing directions as a company. Usually used to describe moving to a different market segment or using established technology for an entirely new purpose.

Ramen Profitable

Profitable enough to cover costs and basic living, and expenses for everyone working for you, usually founders don’t get paid.

Responsive Design

A site built for optimal viewing of a website across all devices.

ROI, Return On Investment

What investors can expect to get for what they put in.


The estimated time it takes until you run out of cash.


Software as a service. Selling of subscriptions to use your software.


Something that has the potential to grow into a much bigger success because the market and demand are big enough or because you’ll be able to move into different markets via pivoting and iterating.


The seed round is the first official round of financing for a startup. This funding round is usually raising money for a prototype or for proof of concept.

Sweat Equity

Shares of your company given in exchange for the work that’s done. A good recruiting tool to help you attract passionate talent you can’t afford to pay at real market rates.

The Space

Startup entrepreneurs like to refer themselves as being players in a given space. (synonym for industry or vertical)

Term Sheet

Document that outlines what the investors will get for what they put in. ( % ownership, voting)


Proof that people are actually using and buying your service and/or product.


UI stands for user interface and UX for user experience, usually used when entrepreneurs refer to the aesthetics and usability of their product.

Valuation - Pre-Money Valuation - Post-Money Valuation

What your company is being valued at.

Pre-money valuation is the value before you take any cash from investors.

Post-money valuation is the original value plus the investment put in.

Value Prop

The features and elements that makes your product and business attractive to your clients.


A product you are selling but haven’t actually executed yet, or may never execute. A good way to test market demand.


Venture Capital or Venture Capitalist. A form of financing that’s provided by firm or funds to small, early-stage companies that have high growth potential. VCs usually invest in exchange of equity. Startups that VCs usually invest in are often from high-tech industries.