In private equity (PE)-backed companies, each KPI holds weight – but its relevance and impact often shift as your company scales.
Investors look beyond today’s performance. They want proof of resilience and potential for sustainable growth.
At Bregal Sagemount’s recent conference, we sat down with CFOs and finance leaders to pinpoint the KPIs that matter most at each stage of growth – from early startup to IPO or exit readiness. Their insights made it clear: while all KPIs hold value, specific metrics offer investors a stronger signal of success as a company progresses.
We echo this sentiment. As a PE-backed company ourselves, we know the importance of maintaining investor-ready data and consistently tracking KPIs that reveal your company’s health and trajectory.
This article breaks down the KPIs that matter at every growth stage – from customer acquisition and cash flow to the metrics that signal maturity and readiness for IPO or exit.
Be "exit-ready" from day one
Vipul Shah, Co-founder and CFO at FinQore, puts it simply: "When businesses operate with exit-ready data every day – rather than preparing it once for The Big Exit – they make decisions more proactively, grow revenue more profitably and increase valuation more predictably."
Why?
When PE firms see your data is always sale-ready, they don’t need to question how you’ll perform in high-stakes situations. Instead, they see a partner with systems and processes built for growth.
Consistency is key here. Preparing data in bursts before an audit or sale only raises questions. Instead, consistent KPI tracking gives investors a real-time view of your operational health. It shows exactly where you stand at any given moment.
When an exit or IPO opportunity arises, you’ve already laid the groundwork. This proactive approach reduces surprises, saves time and ultimately maximizes your valuation.
Key KPIs by growth stage: what investors are looking for
"All KPIs are important all the time, but a lot is driven by the stage where your company is at in the hold." – Mike Empey, CFO at Registrar Corp
Start-up to early growth: foundational KPIs that show potential
In the early stages, “growth at all costs” often drives strategy. The focus shifts from survival mode and solving today’s problems on a limited budget, to gaining market traction, prioritizing sales, revenue and cash.
Investors rely on foundational KPIs here that show this momentum and potential. The metrics they look at to understand your customer acquisition strength, profitability potential and market position are:
- Customer acquisition cost (CAC) – How efficiently are your sales and marketing teams acquiring clients? CAC shows how much your company spends to gain each new customer. Investors look at CAC alongside customer lifetime value (LTV) to determine if the company has a profitable customer acquisition strategy. A high CAC may raise concerns about your ability to grow profitably.
- LTV to CAC ratio – This ratio tells investors more about your profitability. It compares the revenue a customer generates over their lifetime (LTV) to the cost of acquiring that customer (CAC). It answers the question, “Is the value of customers outweighing the cost of acquiring them?” A healthy ratio (typically 3:1 or above) signals achievable profitable growth.
- Net promoter score (NPS) – NPS tells investors where your brand loyalty stands and if there is a product-market fit. It measures customer satisfaction and loyalty by asking how likely customers are to recommend your product or service. A high NPS suggests strong customer satisfaction, meaning your product meets market needs and has the potential for organic growth through word-of-mouth referrals.
- Revenue per employee (RPE) – RPE is an efficiency measure investors track at every growth stage. It shows productivity per headcount by dividing total revenue by the number of employees and tells investors whether each employee contributes effectively to your company's growth.
- Burn rate – Burn rate shows how quickly your business is using capital and how long it can operate before needing additional funding. Investors pay close attention to the burn rate to evaluate your company’s runway and the urgency for future funding rounds. A high burn rate without corresponding revenue growth can signal financial instability, while a controlled burn rate suggests prudent financial management.
- Rule of X – Is your company scaling without overextending resources? The most common form of this KPI is the Rule of 40 – e.g. a SaaS company's combined revenue growth rate and profit margin should equal or exceed 40%. This metric shows investors the balance between your growth rate and free cash flow margins. A higher score on this rule indicates you’re growing properly without exhausting the cash reserves.
Together, these KPIs tell a story of sustainable early growth. They provide investors with a snapshot of customer satisfaction, acquisition efficiency and initial profitability.
Scaling up: driving disciplined revenue growth
The focus shifted from early traction to retention and sustainable expansion – your organization is scaling up. This is where businesses usually start to invest in system integrations and automation to support scaling and investors look for KPIs that show disciplined growth without sacrificing cash flow. KPIs like:
- Net retention rate (NRR) – NRR reflects customer stickiness, loyalty and upsell potential. It’s a key driver for sustained revenue that measures your ability to retain and grow revenue from existing customers, accounting for upsells, cross-sells, downgrades and churn. Investors see high net retention (above 100%) as a positive indicator of product-market fit and revenue predictability.
- Annual contract value (ACV) – ACV shows the average annual revenue per customer contract. It tracks gains in recurring revenue, which investors see as a growth pillar. A rising ACV suggests your business is successfully securing larger or more long-term contracts, and predictable revenue streams signify stability and a platform for further expansion.
- EBITDA less CapEx – Earnings Before Interest, Taxes, Depreciation and Amortization minus Capital Expenditures shows your ability to stay profitable while investing in growth initiatives. While it becomes even more important in later stages as you approach IPO or exit readiness, at this stage of scaling, it demonstrates disciplined financial management and efficient capital allocation – your ability to set the foundation for sustainable, continued growth to maturity.
- Revenue per employee – Same as in the earlier stages of growth, your RPE is an ongoing measure of efficiency, with a focus on sustainable scaling as the team grows. A higher revenue per employee indicates effective resource utilization and suggests that your company can scale without proportionally increasing headcount. Investors track improvements here as a sign of productivity-driven growth.
- Net promoter score (NPS) – Ongoing NPS monitoring remains important for retention-focused companies. And especially when you’re scaling rapidly, it signals ongoing loyalty and opportunities for additional revenue from existing clients (for example through upsell or cross-sell opportunities). A high NPS shows strong customer satisfaction, which can lead to reduced churn and increased word-of-mouth referrals.
At this growth stage, investors want to see your company is well-positioned for sustainable expansion and long-term success. They want to see both growth and profitability. Consistently strong values for these KPIs provide evidence of that balance and disciplined scaling that doesn’t sacrifice future cash flow.
Scaling to maturity: preparing for IPO or exit
Here, investors want assurance that you’re building long-term, reliable value, so the KPIs become more refined. They expect you to show your company’s maturity, financial stability and readiness for IPO or acquisition, with a focus on cash flow, revenue retention and cost efficiency. Here’s what matters:
- Customer acquisition cost (CAC) – CAC remains vital at this stage, as it shows investors you can acquire new customers sustainably while scaling. They expect your CAC to have a stable or downward trend because this demonstrates you’ve optimized your marketing and sales efficiency and can sustain customer acquisition costs without excessive investment.
- Gross customer retention – Gross customer retention (the percentage of customers retained without upsells) tells investors if the product holds onto its core customer base. They see it as an indicator of the stability of your revenue base – a reassurance of consistent, reliable revenue. A strong, high retention rate signals your company is less likely to suffer from high churn. This stability brings more predictable revenue and is attractive in public markets, where consistency is rewarded.
- Gross and contribution margin – Gross margin (revenue minus direct costs) and contribution margin (revenue minus variable costs) tell investors how efficiently your company generates revenue relative to its expenses. High gross and contribution margins show you have optimized the cost structure, can turn revenue into profit more effectively and can withstand competitive pressures – a key indicator of your scalability, profitability and resilience power.
- EBITDA less CapEx – This KPI shows your core operating profitability and ability to generate cash flow without the noise of growth expenses. It tells investors how much actual free cash flow is available for debt repayment, dividends or reinvestment. A positive figure signals the ability to fund capital expenditures without external financing.
- Rule of X – Same as in earlier growth stages, this KPI helps validate the balance of growth and profitability – a key factor for high valuations. For SaaS companies, the most commonly used is the Rule of 40, but some adjust the benchmark based on industry norms or company maturity, and use variations like the Rule of 50 or Rule of 30.
- Revenue per employee – RPE remains important at this stage too – it shows your ability to scale operations and generate high revenue without proportionally increasing headcount. A high value here indicates your company is lean and efficient and can sustain or grow revenue without significantly increasing operational costs.
- Net dollar retention (NDR) – NDR, or net revenue retention, shows investors your ability to grow revenue from your existing customer base. It includes renewals, upsells and cross-sells, showing whether customers are increasing their spending over time. A high NDR (often above 100%) tells investors that your company has a strong, loyal customer base that trusts you and is willing to pay more for your products and services.
Hitting these KPIs out of the park signals that your company is ready to face public scrutiny or acquisition, with a strong, loyal customer base and well-oiled operations that can easily support continued growth and expansion.
NetSuite ERP is the "North Star" for PE-backed growing companies
KPIs tell investors where you stand, but it’s the systems behind those numbers that determine whether you can sustain growth.
As your company grows from a startup to scale up and further up, your data and operational complexity increase. Tracking KPIs accurately becomes a small part of a larger goal – setting up systems that make growth seamless and reliable.
Many founder-led businesses usually start with tools like QuickBooks or Xero. But as revenue, headcount and customer complexity grow, tools like QuickBooks quickly reach their limits.
Many companies then turn to NetSuite – a preferred ERP for PE portfolio companies – to maintain a high standard of operational clarity and avoid data silos, system miscommunication and inefficiencies that slow decision-making. NetSuite helps track KPIs reliably, but it also supports scalable, optimized operations across all growth stages.
Why PE/VC portfolio companies rely on NetSuite ERP for scalable growth
PE-backed companies know that growth is more than hitting KPIs, it’s also about building the systems that make those KPIs a given.
Why is NetSuite the go-to ERP for PE-backed companies?
- NetSuite creates a foundation for operational excellence and resilience at every stage of growth.
- Investors know NetSuite delivers the kind of control, visibility and scalability needed to properly grow, no matter the business model or complexities.
- With NetSuite, teams operate at peak efficiency, where KPIs naturally align with company goals rather than requiring constant adjustment. This alignment frees companies to focus on growth, rather than spending time course correcting.
- For businesses with more complex needs – like managing subscriptions, multiple billing models or usage-based billing – integrated extensions within NetSuite, like ZoneBilling or ZoneReporting, expand ERP capabilities without adding external systems or disrupting workflows.
- These NetSuite extensions keep everything under one roof, so data flows seamlessly. Inefficiencies and data silos that can hold a company back are eliminated, and as a result, every KPI tells a clear, up-to-date story about the company’s health and operational strength.
For these exact reasons, many investor-backed companies are making the switch from smaller, less scalable systems to NetSuite.
For PE investors, this unified visibility instills confidence in a company’s growth potential. And when you set up reliable, consistent and accurate insights from day one, you’re building the trust and transparency that PE investors value most.
The result? A company positioned to act on opportunity, ready for whatever comes next.
How PE-backed company achieves success with NetSuite and ZoneBilling
Power Factors, a PE-backed company in Vista Equity's portfolio, is a great example of how optimized billing can strengthen financial foundations and support rapid growth.
With ZoneBilling inside NetSuite, they reduced revenue booking time by 94%. What was once a high-touch, complex process became streamlined, freeing up resources for strategic growth.
This operational improvement enabled Power Factors to leverage their ERP investment fully and gave Vista Equity confidence in the company's operational resilience – knowing they’ll be able to continue to grow without setbacks.
Build success with scalable systems that support growth
Each KPI reflects a piece of your company’s health and potential, but the systems behind them tell the full story. With the right infrastructure in place, you’re tracking the right metrics and building a business that can scale and adapt.
Investors see the value in companies with solid systems that make data reliable, accessible and ready for decision-making every day.
With NetSuite and the right lead-to-revenue, purchase-to-pay and reporting solutions, your data will be investor-ready every day, preparing you for any opportunity and complexity that comes your way.
We partner with many private equity and venture capital (PE/VC) firms to equip their portfolio companies with automation solutions within NetSuite and help maximize their ERP investment. Read how other companies are building systems that make growth a seamless part of everyday operations with our solutions.
