Key Metrics
Tracking key metrics enables users to understand the health of different parts of the pipeline.
In configuring a sales process, a set of key metrics is used to determine pipeline health at every stage. Using these metrics, companies are able to identify areas in which the process might be falling short.
The below table provides an overview of four key metrics that users can track to measure pipeline health:
| Key Metric | What It Measures | Implications | Calculation | Period |
|---|---|---|---|---|
| Pipeline Fluidity Score | Measures the forward momentum within the pipeline | A low score indicates low activity and highlights the need for faster movement | Number of deals that changed stages | Weekly |
| Access Success Rate (ASR) | Measures the success rate in getting access to targeted investors | A low score indicates the need for a reliable way to land warm intros and first calls | % of deals in the “Seeking Intro” stage that convert to first call | Monthly |
| First Call Conversion | Measures success in first calls | Vary substantially | % of first calls that convert to second calls | Monthly |
| Second Call Conversion | Measures success in second calls | Vary substantially | % of second calls that convert to a due diligence process | Monthly |
It is important to view the above metrics as performance indicators for the process, and not for the fundraising outcome itself. By measuring the above metrics, users can get a precise understanding of parts of their fundraising pipeline in which they are doing well, and parts where they may need additional support.
Pipeline Fluidity
For early stage rounds, including Pre-seed, Seed or Series A stages, users typically have to engage with 40-50 investors before landing an offer. In certain market conditions and/or sectors, this number may be higher.
A low pipeline fluidity score may be problematic for users looking to raise in a finite period of time, or in instances when the Company has a limited runway. Conversely, for late-stage rounds in which users are running a niche process, pipeline fluidity may be less important.
Access Success Rate
In most fundraising processes, users need to figure out a process that repeatedly leads to warm introductions with investors. For some users, this may come via their existing investors. For others, introductions may come via new connections that they build using Metal Connect or other forums.
A low ASR indicates that the process to land warm introductions is not working well and needs attention. During fundraising season, most users should target at least 10-20 warm introductions each month. The best way to ensure this is through preparation prior to the fundraise in two activities – (a) building connections with VC-backed founders and other key industry players, and (b) Preparing world-class materials that help build access.
Conversion Rates
Conversion rates are particularly useful in helping users understand the effectiveness of how they are approaching investors. If the second call conversion stands at less than 25%, then that is a strong indication that the first call is not yielding the sort of results that are typically seen in fundraising processes.
Similarly, if less than 25% of all second calls lead to a due diligence process, then that is an indication that the first or second call is perhaps not going well.
Ultimately, metrics are a way to determine pipeline health in specific areas. The above metrics are in no way indicative of the success or lack thereof in a fundraising process.