The overlooked data points that show VCs you’re not just growing – your growth is healthy

Startups live and die by metrics. Founders are laser-focused on burn rate, CAC, LTV and runway – and rightly so. These are critical performance indicators that guide funding and growth.

But in their obsession with financial KPIs, many founders overlook the most important variable in a startup’s success: people.

Today’s VCs aren’t just betting on your tech or market size – they’re betting on your team’s ability to build and scale. According to HR Magazine UK and HiBob’s 2024 report, many leading VCs now request HR metrics before they sign term sheets – including attrition, quality of hire, engagement and diversity.

However, startups that track people data raise faster, scale smarter and avoid the #1 silent killer of growth – people dysfunction.

Here are five HR metrics that tell investors you’re not just burning cash – you’re building a scalable, investable business.

1. Attrition Rate – Are your top performers sticking around?

What it means: The percentage of employees who voluntarily leave your company in a given year.

• Target: Annual turnover <15%
• Red flag: High performers leave within 12–18 months

Why it matters: High attrition costs more than money – it slows growth, disrupts continuity and signals leadership or cultural problems. If your A-players are leaving, investors will see deeper systemic issues.

Fix it: Conduct exit interviews to isolate cultural vs. performance-related attrition. Address recurring themes fast – especially around career progression, leadership style and workload.

2.Time-to-Hire – Can you fill roles fast enough to grow?

What it means: How long it takes to go from opening a role to accepting an offer.

• Target: <45 days for key roles
• Red flag: Founders still running all hiring personally

Why it matters: A slow hiring process kills momentum. It can demoralise teams, delay product roadmaps and cost you top candidates. It also signals poor delegation and structure – major concerns for VCs looking at scalability.

Fix it: Startups should bring in talent support early (even part-time). Implement structured hiring processes and empower hiring managers to own decisions.

3. Leadership diversity – Is your team built for long-term resilience?

What it means: The proportion of leadership roles held by women, ethnic minorities and other underrepresented groups.

• Target: Leadership team includes underrepresented groups by Series B
• Red flag: All-male or culturally homogenous leadership

Why it matters: Diverse leadership isn’t just optics – it improves decision-making, innovation and fundraising success. According to Atomico, 45% of UK VC-backed startups still have zero women in leadership – a growing red flag for DEI-focused funds.

Fix it: Track diversity at the leadership level early. Set goals, build inclusive hiring practices and ensure your board values representation.

4. Compensation equity – Are you paying fairly and transparently?

What it means: Whether employees are paid equitably for similar roles and responsibilities across demographics.

• Target: <10% gender or ethnic pay gap across levels
• Red flag: No documented pay bands or levelling structure

Why it matters: Unfair pay is a retention killer. It damages trust, fuels disengagement and invites legal and reputational risks. In 2024, UK regulatory pressure on ethnicity and gender pay transparency is mounting – and VCs are paying attention.

Fix it: Introduce a levelling framework and pay bands by role and level. Use benchmarking tools like Figures, Hubble, or Breathe HR to stay competitive and fair.

5. Employee Net Promoter Score (eNPS) – What’s the internal sentiment?

What it means: eNPS measures how likely employees are to recommend your startup as a place to work – a direct window into engagement and morale.

• Target: eNPS >30
• Red flag: No regular feedback loops or surveys

Why it matters: A low eNPS is an early warning sign of culture rot. If your team’s disengaged or burnt out, performance will drop and attrition will rise – often before founders even notice.

Fix it: Run bi-annual pulse surveys. Share results transparently and, more importantly, act on the feedback. Show your team their input matters.

2 Advanced HR metrics that VCs care about

Ramp rate – How quickly do new hires become productive?

Why it matters: If new hires take 90+ days to hit key KPIs, you have an onboarding or enablement issue. That slows down growth and drains resources.

What to track:

• Time to first KPI
• % of hires hitting full productivity within 60 days
• Manager feedback at 30/60/90 days

Case example: One pharma startup we worked with cut ramp time from 90 to 45 days by assigning onboarding buddies and creating clear 30-day expectations – reducing CAC by 15% as sales reps hit quota faster.

Salary scale distribution – Are you scaling pay equitably?

Why it matters: Even with good intentions, pay disparities creep in without structure. Mapping salaries by level and demographic group helps uncover hidden inequities before they become liabilities.

Pro tip: Use benchmarks from platforms like Figures or Hubble to design compensation frameworks that grow with your team.

Why these HR metrics are non-negotiable for startups

Investors aren’t just betting on your tech or TAM. They’re betting on your team, your culture and your ability to scale sustainably. Financial metrics get the meeting. People metrics close the deal.

If you’re only tracking burn rate and runway, you’re missing half the picture.

Key takeaways for startup founders

• Track early, track consistently: Even before your first HR hire, use simple dashboards and external support.
• Hire HR leadership by 30–40 employees: Earlier if fundraising or expanding globally.
• Build a levelling and pay framework now: It’s 5x easier at 25 people than 75.
• Prioritise leadership diversity: It improves culture, decision-making and investor confidence.
• Run eNPS surveys twice a year: And act visibly on the results.
• Signal HR maturity to VCs: It’s a shortcut to credibility – and a sign you’re ready to scale.