Neil Patel

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How to measure fundraising success for a startup?

Fundraising and startups have become synonymous with each other. For many, funding is vital to make ventures viable and get off the ground. For others, it is an essential step for fully realizing the vision and maximizing the potential to scale and dominate an industry.

Being so pivotal for overall success, it just makes sense that entrepreneurs and startups are tracking and measuring their fundraising success and performance.

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So, what should guide you as you measure this data? What metrics are worth tracking? Which can be misleading distractions? What do you do with it?

Why Measure Your Fundraising Success

Tracking and measuring your fundraising success is about knowing how well you are doing. When you have clarity on this, you know where you are doing well or not. You can see what needs attention and improvement.

Without this data, you are flying blind on pure assumption. That isn’t a reliable formula for succeeding at anything, or getting the most out of your investment in it.

In most cases, you might be surprised at what the data reveals you should be doing, versus what you thought would work. That’s the reason why you should learn how to measure fundraising success.

Ways To Measure Fundraising Success

Funding Rounds Closed

How far have you progressed through rounds of funding? It doesn’t just all come at once. You don’t just ‘get funded’ and you are done. The number of rounds of funding startups has been raising before an exit is also considered.

More big startups have been choosing to stay private and grow themselves long before an M&A transaction or going public with an IPO.

It is not uncommon to go beyond a Series C round. You may raise a Pre-Seed, Seed, and Series A through E.

Your progress through these rounds can be a great indicator that your startup is growing, proving itself, and is derisking itself as it expands and attracts more smart money investors. Just don’t get too hung up on plowing through rounds for the sake of it, and ignore the real reasons you should be raising.

It’s not about the money, it’s what it can do for you. Or more importantly, what bringing in additional investors can do for your venture.

Would you like more information about what to do if your investor outreach is not working? Check out this video where I have put down some interesting tips you can use.

Dollar Amount Raised

How much money has your startup raised in total so far? How big have each of your rounds been? Find answers to these questions when figuring out how to measure fundraising success.

This can give you some measure of how you are doing from round to round and on the startup landscape and within your sector. Big raises can make great headlines. Many see this as a badge of credibility. One which can attract customers, talent, partnerships, and other investors.

However, be clear that the dollar amount that you’ve raised doesn’t necessarily directly correlate with other more important success metrics. Unless your only goal with this startup was to raise as much money as possible.

There are plenty of startups that have raised big money and have roped in notable celebrity angels and famous funds and then failed horribly from a business perspective. Look at WeWork. Even billions of dollars couldn’t cover up their flawed business model.

Sometimes, the more you raise, the less you’ll exit with. Or the fewer options you’ll have on a daily basis and for an exit. It can be a constraint if you are not careful.

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The same goes for valuation. Though you do want to track this to ensure you aren’t facing a ‘down round’.

During the fundraising process, it makes more sense to be measuring how much you are raising as a percentage of your total goal.


While you need to focus on your own business above what your competitors are doing, benchmarking your fundraising against your competition does have its place and benefits for startups.

Most importantly, how much are you raising compared to others? And how to measure fundraising success.

Be specific. How much are you raising at the same stage or round, against similar startups in your industry, and by type and business model (i.e. SaaS, marketplaces, hardware, enterprise, or B2C)?

This is important firstly for perception. If a direct competitor is raising more at the same stage, it looks like they may be doing better. At least on the surface. It can carry weight with the talent you are trying to recruit, prospective customers, suppliers, and other vendors, and who they choose to work with.

If you are asking for less than a competitor just raised at the same stage that may also raise big questions with investors.

In financial terms, it is often the startup with the biggest chest of cash that wins the market too. Assuming you are all operating at the same level of efficiency and profitability, the company with the most cash has the best ability to seize on opportunities, outmarket and buy up market share and survive interruptions and crises.

Investor Match

While this may be a hard factor to put a number on, it is still very important. Not all money raised is equal or of equal benefit and value.

Were you able to secure capital from investors you really wanted to bring onto your cap table? If you sacrifice poor matching investors for money, everything can be harder, and the journey can be much less enjoyable than you imagined.

Other investors may bring a lot more value than expected. They can offer resources, workspace, talent, access to vendors and distribution channels, branding and goodwill, and their expertise and connections. Take these factors into consideration when figuring how to measure fundraising success.

Returns On Dollars Raised

By far the best measure of the fundraising success is the returns you gained from the dollars raised. That’s what it is really about, right?

What have you actually tangibly gained from raising this money, and running a fundraising campaign?

Previous Rounds

Once you get money in, you have to put it to work. Investors are expecting big returns on that capital. It needs to be put into action quickly and effectively.

Start by ensuring you are tracking the returns on previous funding rounds. What did that capital give you in terms of real returns? From a pure business perspective, the most obvious metric to track is net profit. How much have your profits grown since and in relation to your last round of funding?

What about revenues and cash flow? These can also be barometers of business value and returns. And, they are some of the key factors to assist you when understanding how to measure fundraising success

Current Rounds

A strong fundraising campaign may not just result in equity capital being raised. The marketing, PR, networking, and interaction you are pushing during fundraising can also show up in new business. Others will notice and may become customers.

Some investors may not start by putting in the capital but may become customers or refer you to great connections for growing your business.

This can add a lot more to the true return on your fundraising campaign. But, do keep an eye on the critical business metrics.

Other Metrics To Track & Measure During Fundraising

Return On Investment

How much have you gained in capital raised in relation to what you’ve invested in fundraising?

Fundraising isn’t cheap. It can require a significant investment. Founders can spend 50% or more of their time on fundraising efforts in early rounds. That also comes at the cost of not working on the business and pushing other metrics and developments.

You will likely have a significant amount of labor costs between professional copywriters, designers, and even marketing outreach and fundraising specific consulting and help. There are also tangible hard costs like software and maybe flying to investor meetings.

Don’t forget attorney’s fees for helping with paperwork and negotiating term sheets. There may be direct ad and PR costs. Be sure you are tallying it all up.

As rounds get bigger, costs will hopefully become a much smaller percentage of your raise. So, did you make 4x your investment? 10x, 100x, or more?

Hires Made

If expanding hiring by scaling workers or bringing in key executives and other talent was the main priority for fundraising, how have you done at securing that talent? Have they stayed? What tangible returns have those hires produced?

A key data point to track here is revenues per employee.

Accounts Receivable

If you haven’t booked actual cash from new sales attributable to funds raised, what sales have you booked, future revenues have you secured that you expect to come in as a result of that?

These may be orders not yet filled, new channels you can count on, contracts, or recurring subscription revenues.

Be sure you are tracking all of your other revenue statistics too:

  • Gross revenue
  • Revenue per customer/sale
  • Average total revenue per customer
  • revenue per customer
  • Annual revenue per customer
  • Number of customers or users (active versus inactive)

These numbers will be instrumental in your next pitch deck update and raising future rounds of capital.

Customer Acquisition Costs

What is it costing to acquire each customer on average? Break this down by organic versus paid sources, and referrals. Calculate an overall blended rate as well. How has the last round of funding helped you to optimize this metric?

You may also be tracking unpaid users along with these numbers if you are using a freemium business model or free trials. Just be sure you are also measuring the conversion of free users to monetization. These figures will prove invaluable when understanding how to measure fundraising success.

Customer Happiness

Customer happiness is one of the most important leading indicators of future success. How has funding helped you improve on this front?

With each round you are building and improving on that MVP, are able to iterate and polish your workflow and systems, and dedicate more resources to customer service.

Related metrics to measure here include:

  • Average customer lifespans
  • Customer retention by the cohort of customers
  • NPS scores
  • Referrals
  • Repeat business
  • Revenue per customer
  • Lifetime customer value

Burn Rate & Runway

Be sure you are tracking your own finances through your fundraising campaigns. How much cash do you still have in the bank? What is your burn rate (the amount of cash you are burning each month)?

How many more months of life does that give your startup before you must close the round and get wires in the bank or fold?

The more runway you have, the stronger the negotiating position you are in, and the less stressed and more objective you can be.

Make sure to refer to your fundraising timelines next time to ensure you are planning and preparing far enough in advance, and have a reasonable timeline set for the active portion of your campaigns.

Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.

Impact Metrics

The financials matter. You can’t stay in business and keep making a difference unless you are balancing the budget. However, some startups are on a mission. One that is more focused on the value and impact they are having than just profit. Track this data for yourself, and for investors who care too.

Examples of this may be patients served for health tech startups, emissions cut for green startups, or people helped or fed for social mission-based ventures.

How To Measure Success Of Fundraising Efforts

To measure how effective you are doing at rolling out your fundraising campaign, and delivering what you need to, keep an eye on these data points as well.

  • Investor conversion ratio to pitches made
  • Average raised per investor
  • Funds raised per pitch given
  • Pitch deck views
  • Time spent viewing your deck
  • Website traffic
  • LinkedIn profile views
  • Data room views
  • Email open rates
  • Email click-through rates
  • PPC and social media ad metrics

These numbers will show you where the gaps are, where you are losing investor prospects, and where you can improve, and run a more efficient and profitable campaign. You’ll quickly learn how to measure fundraising success.

You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.

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Neil Patel

I hope you enjoy reading this blog post.

If you want help with your fundraising or acquisition, just book a call

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