The failure of a startup is the founder’s worst nightmare.

If you are a new startup founder, you need to understand the reasons behind the failure of most startups. Startups crash and burn primarily due to a lack of funds or lack of market need.

Understanding the Startup metrics and cash flow indicators of how well your company is doing is essential. Depending on what’s important to you and your business, there are many different startup metrics that you can monitor. They can help you determine the progress of your company startup, track your objectives and make appropriate changes where required.

Startup tracking can be intimidating as there are numerous parameters that must be tracked. Here are some startup metrics that will help you keep a pulse on where your startup stands 

1. Cash in Hand

The amount of cash you have at the end of the previous month is known as cash on hand. It is calculated by subtracting the non-cash assets from the total current assets. This can help you determine your expenses and income in terms of cash. 

2. Monthly Cash Burn

The difference between the cash in hand at the end of the current month and the cash in hand at the end of the previous month is your monthly burn. This lets you know how much money has left your account.

3. Run Rate

Run Rate is a little trickier. Given your current cash in hand and monthly burn, the run rate calculates the months you have left to operate the business. If your burn rate remains constant, this number will remain constant. But, the burn rate in startups is likely to grow rather than stay constant. In such cases, the run rate of your business would also go down. 

4. Gross Margin

Net sales minus the cost of the goods sold gives you the gross margin. In other words, it’s the sum of money that a business keeps after paying the direct costs involved in creating the products and services that it sells. If a company retains more capital, it can use it to cover other expenses or pay off debt.

5. Customer Lifetime Value

While gaining new clients is imminent for a startup, maintaining existing clients is crucial too. The average projected revenue from a client before they leave is known as their LTV. LTV aids you in determining how much you can afford to spend on customer acquisition. It is practically hard to grow if your acquisition cost exceeds your LTV because you will lose money on every new customer you bring in.

6. Customer Acquisition Cost (CAC)

To quantify the value created by a new customer, the customer lifetime value (LTV) metric is frequently used in conjunction with the key business metric of customer acquisition cost (CAC). The expense incurred when obtaining a new client is known as the customer acquisition cost (CAC). In other words, CAC represents the resources and expenses needed to bring in a new client.

7. Engagement Metrics

Calculating engagement metrics will solely depend on the kind of business you run (marketplace app, Saas product, or physical product). Your engagement metrics are directly connected to your revenue expansion. When revenue is driven by healthy engagement, it is bound to grow.

8. Revenue Growth

Revenue growth is the most crucial barometer that all startup investors are interested in. It displays how much your revenue has grown over the last couple of months. If your revenue is increasing, this should indicate that you are on the right path.

Whether you are a VC startup or a self-funded startup, these revenue metrics will help you measure the key financials of your company. They will help you track your progress and maximize growth. We advise that you monitor these fundamental Key performance metrics regularly.

STRATEGIES FOR SUCCESSFUL MERGERS OR ACQUISITION SERVICE

Transactions involving mergers and acquisitions firms are highly complex, and every merger has its difficulties. With the right merger and acquisition strategies, you can bring an appropriate level of experience, insight, and support to your business. 

To curtail the challenges associated with mergers and acquisitions, we have come up with some well-thought-out strategies:

• Transparency in Communication

Transparency in communication is the key to the optimum synergy between the merged entities. Post the merger and acquisitions of companies, and it is important to communicate regarding the sourcing engagement. 

Given the complexity involved in combining two separate businesses with diverse cultures, reporting structures, and rules, it is vital to communicate early and effectively for any M&A reporting program. There must be clear M&A communications regarding project launch and implementation and milestone achievements.

• Implementation of the plan

The teams working for deal sourcing in merger and acquisition companies develop an implementation plan that will put things into action. The implementation programme generally involves five major phases:

• Pre-Implementation due diligence
• Post-implementation due diligence
• Evaluating the suppliers and contracts against the guidelines of the recent merger and acquisition
• Leveraging the scale of combined entities to boost business
• Identify the need for process improvements, if any.

The merger and acquisition firms should then work on implementing the process improvements to generate more leads and get the most savings.

• Involvement of senior committee

The support of senior management and leaders across various verticals, including the managing committee, is imminent for the merger and acquisition success.

The steering committee provides the Mergers and acquisitions consulting and makes critical decisions regarding switching suppliers, implementing cutting-edge technology, altering operational procedures, avoiding mistakes, and evaluating and reducing risks.

PRIVATE EQUITY AND VENTURE CAPITAL: WHAT’S THE DIFFERENCE?

Even though private equity and venture capital funding have some equalities, the two have several subtle differences. Both private equity and venture capital are standard modes of funding, but the private markets are far more significant and complex. 

Before scrutinizing further, let us understand more about private equity and venture capital funding.

1. What They Are:  

Private equity generally refers to a private investment company that invests in the shares of a company that are not publicly listed. Private investment companies acquire businesses or holdings in enterprises to sell them later for a profit. 

Venture capital funding refers to funding new and emerging startups by other companies or wealthy entrepreneurs called venture capitalists. They make investments in exchange for a share of the company.  

2. How do they work?

The Private equity firms acquire the companies undergoing financial stress and restructure them by paying off their debts, hiring new management and improving the overall operations.

However, Venture capital involves infusing the investment capital in an emerging startup to create a limited partnership. Venture capitalists make an equity investment in a company and use their funds to grow the business and generate revenue for themselves. 

A venture capitalist is not a silent partner with deep pockets; they bring their expertise on board and keep tabs on the business and their investments. They act as the driving force in the future fundraising process.

If you are looking for your startup investing, many factors can help you choose between private equity investors and venture capitalists. Some of these factors are the objectives and stage of your business.