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founderpath.com · newsletter
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It's Nathan.
Every SaaS founder walks into investor meetings knowing their ARR (Annual Recurring Revenue).
But if an investor asked for the other 7 key metrics (besides ARR) they want to know before investing, would you know the answers?
Investors are running 8 calculations before they decide where to put their money on.
After 3,862 SaaS founder interviews, I know numbers kill a deal in the first meeting, and which ones get a term sheet wired the same day.
In this email: 8 KPIs every SaaS founder needs to own before they raise.
(Part of the 352 growth playbooks built from my $271m SaaS fund.)
1/ ARR (Annual Recurring Revenue)
Your annualized subscription revenue.
$1m ARR: typical Series A threshold
$5m ARR: opens the Series B conversation
But this number matters more than the absolute figure: your ARR growth rate.
A company at $3m growing 15% month-over-month tells a different story than one at $3m growing 2%.
2/ MRR (Monthly Recurring Revenue) broken down.
Split into 4 buckets:
New monthly recurring revenue
Expansion monthly recurring revenue
Contraction monthly recurring revenue
Churned monthly recurring revenue
Knowing the total is not enough. Example:
Two companies, both showing $100k in net MRR growth this month:
Company A: $200k new MRR. $100k churned. Net: +$100k.
Company B: $80k new MRR. $20k expansion MRR. $0 churned. Net: +$100k.
Company A is spending to acquire customers who leave at the same rate. CAC is doing the work that retention should be doing.
That model breaks the moment acquisition slows down.
Company B is compounding. Existing customers are buying more. That business gets easier to run every month.
An investor sees this in 30 seconds when you break down MRR by component.
If you only show them the total, they will ask for the breakdown anyway.
3/ Churn Rate
The percentage of customers who stop using your SaaS product during a given time period.
Best-in-class: monthly revenue churn below 0.5%
Danger zone: above 2% monthly
Above 2%, you’re losing 32% of your revenue base per year. No growth rate fixes that math.
4/ NRR (Net Revenue Retention)
The share of existing-customer revenue retained after churn and contraction, plus expansion.
Above 120%: world-class
100-110%: healthy
Below 100%: your existing customers are shrinking your revenue base
If your NRR is below 100%, fix it with these playbooks before you raise.
5/ Net Burn Rate
Your monthly expenses minus revenue.
This is your runway engine.
If you want to get a clear overview of this metric and others, use 19 free calculators and benchmarking tools built for SaaS founders.
6/ Burn Multiple
Net burn divided by net new ARR.
Below 1x: exceptional
1x-2x: efficient
2x-4x: needs attention
Above 4x: unsustainable
Investors now use burn multiple as a primary efficiency metric alongside NRR.
7/ Break-Even Point
The revenue at which total costs are covered.
SaaS contribution margins: 70-90%
Implication: a relatively small customer base can cover high fixed costs, but only if pricing is set correctly
8/ EBITDA Margin + Rule of 40
(EBITDA - Earnings Before Interest, Taxes, Depreciation, and Amortization).
The primary profitability metric PE firms and acquirers use.
Median public SaaS in Q3 2025: ~9%
Top performers: 30%+
Add your EBITDA margin to your ARR growth rate. That is your Rule of 40 score.
Below 40: there's work to do
Above 40: investors compete for the deal
Here's a quick cheat sheet to share in your next meeting:
29 May 2026 - Nathan Latka - Visual 1
Know all 8 before you open a fundraising conversation.
Joel Ullman used non-dilutive capital from Founderpath to improve his numbers. 19 draws totaling ~$3.5m. No equity given up. Once his numbers allowed him to negotiate from a position of strength, he exited for life-changing money.
If you need capital to improve them first and increase your valuation, I’d love to write you a check.
I've invested $271m in 727 SaaS founders, and took 0 equity from them.
Reply to this email with your questions or request and I'll try to answer in the next hour.
Nathan Latka
CEO, Founderpath
PS: We have three funding options:
Revenue Financing: must have $1-3m revenue. Capital in 24 hours. No equity, no warrants.
Term Loans: $3m+ revenue. Interest-only periods. No warrants. 4-year paybacks.
Merchant Cash Advance: Seasonal revenue. Pay back as a percentage of monthly sales.
Apply here or reply: https://founderpath.com/
PPS: I'm traveling in Europe for the next few weeks and would like to invite you. List of events I'll be attending:
image
Get your ticket:
Fri, Jun 5, Stockholm
Tue, Jun 9, Amsterdam
Thu, Jun 11, Barcelona
Fri, Jun 12, London
Mon, Jun 15, Paris
Tue, June 16th, SaaSiest Paris (use code NATHANVIP for a free ticket)
Thu, June 18th, SaaSiest Munich (use code NATHANVIP for a free ticket)
Reply and LMK if you'll join.
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Founderpath, 815A Brazos Street, , Austin,TX,78701,USA,(210) 718-8920
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