In the context of VC-backed startups, key metrics are the numbers a company uses to show that the business is working — and that new capital will compound returns rather than just buy time.
The exact metrics depend on the business model, but investors and operators usually mean things like:
When people say metrics are “up and to the right”, they mean the curves investors care about are trending in the right direction: more revenue, better retention, improving efficiency.
Dilution hurts less when a company is clearly winning. Strong key metrics give founders leverage in a fundraise: they can raise on better terms, sell fewer shares, and protect existing shareholders.
Weak metrics flip that dynamic. Capital has more bargaining power, rounds get harder, and dilution tends to be worse.