Metrics get fuzzy when founders, investors and dashboards each use the same word for different numbers. Andreessen Horowitz partners Jeff Jordan, Anu Hariharan, Frank Chen and Preethi Kasireddy compiled the 16 most common or confusing startup metrics, with the definitions investors actually apply. The point of the list is not fundraising theater - it is knowing how and why your business is working.
Numbers that are not the same thing
Bookings vs revenue: bookings are the value of a signed contract - the customer's obligation to pay. Revenue is recognized as the service is actually delivered, governed by GAAP. Letters of intent and verbal yeses, the authors stress, are neither. GMV vs revenue trips up marketplaces the same way: gross merchandise value is the total sold through the platform, not what the platform earns. And TCV vs ACV: total contract value covers the whole contract including one-time charges, while annual contract value measures a 12-month slice.
ARR done honestly
Recurring revenue is where definitions bend most. ARR should include only revenue components that are recurring - it excludes one-time fees and professional services, which carry lower margins and do not repeat. The classic mistake is taking one all-in bookings month, multiplying by 12, and calling it ARR. a16z also suggests watching ARR per customer: if you are upselling, it should be growing. On profitability, gross profit should capture the costs of manufacturing, delivery and support - and you should be ready to break down exactly what your figure includes.
Acquisition and lifetime value
CAC should be the full cost of acquiring a user, including referral fees, credits and discounts. Blended CAC - all acquisition spend over all new customers - is not wrong, but it hides whether paid campaigns are profitable, which is why investors weigh paid CAC more heavily. LTV is the present value of future net profit from a customer, not their revenue: contribution margin per month multiplied by average customer lifespan, where lifespan is one over monthly churn. With little history, a16z prefers measured 12- and 24-month LTV over projected curves.
Services revenue and the valuation trap
The authors also explain why investors discount services-heavy revenue: it is non-recurring, lower margin and harder to scale than product revenue. A startup can look bigger than it is by folding setup fees, consulting and one-time charges into its headline number. The fix is separation, not spin - report product revenue, services and one-time fees as distinct lines so the recurring engine is visible on its own.
Growth rates
Even month-on-month growth has a preferred method: investors favor CMGR, the compounded monthly growth rate, over a simple average of monthly rates. The full list runs to sixteen, including active users, deferred revenue and billings - revenue plus the change in deferred revenue, a useful SaaS health proxy. The throughline is discipline: pick the honest definition, keep it consistent, and be ready to show your workings.
Further reading: 16 Startup Metrics - a16z