"There are many reasons to enjoy investing at Series A. One factor is purely human: it’s uniquely gratifying to support founders at this inflection point, as they progress from early product-market-fit to sustainable long-term growth. Another is the diligence process itself, which calls for a blend of right- and left-brained thinking."
The Art and Science of Investing
At Mosaic, we love investing at Series A for two big reasons. First, supporting founders at the moment they transition from product-market-fit to real, sustainable growth is incredibly rewarding. Second, the diligence process itself demands both creative vision and hard data-driven thinking. We ask ourselves—how will the world evolve over the next 5–10 years, and can this company help shape it? And finally—are the early KPIs giving us confidence that the founders’ vision is starting to take shape?
We're thesis-driven when it comes to markets and teams, and metrics-driven when it comes to execution. Both are essential complements.
The SaaS Metrics Cheat Sheet
Here’s a view into the benchmark set we apply to most SaaS startups at Series A:
- Net Dollar Retention (NDR) is the single most telling metric we track. If your existing customers love what you’re building and spend more over time, that’s a powerful signal for durable growth.
- We don’t overemphasize LTV or LTV:CAC at Series A, because your customer cohorts are still too young to extrapolate lifetime values accurately.
- CAC calculations often don’t give the full picture unless they include all relevant overhead, discounting, and indirect costs—without that, it’s misleading.
- NPS scores are prone to bias—especially if the feedback only comes from customers who renewed and excludes churners. It’s an unreliable measure of true satisfaction.
- Logo lists look impressive, but they can mask risk. A single blue-chip logo might represent 50% of revenue, or just 2%. Without clarity, that’s blind luck—not strategy.
Context Matters
These benchmarks are most applicable to mid-market SaaS businesses with ACVs of roughly $25K to $100K and inside sales models. But context truly matters:
- Enterprise field sales often come with longer CAC payback, longer sales cycles, and higher gross dollar retention.
SME or product-led models tend to have shorter CAC payback, faster cycles, and tolerate higher churn—structure your metrics lens accordingly.
Final Takeaways
Numbers alone never tell the full story—especially in early-stage investing. We use a “cheat sheet” of key metrics that are predictive, but they must always be interpreted alongside judgment on teams, product execution, and market context.
Explore the full topic on https://www.mosaicventures.com/patterns/evaluating-saas-metrics
