Raising capital is a major step for Australian businesses. It gives founders access to funds for growth, hiring, marketing, and expansion. Investors look beyond your business idea. They study your financial results before making decisions. Your financial metrics show how your business performs.
They explain how you earn money, manage costs, and use cash. Many founders focus on sales and customer numbers. These areas matter, but your financial reports need equal attention. Strong financial records help investors understand your business. They also help you make better decisions.
Before you approach investors, learn these five key financial metrics:
- Revenue Growth Rate
- Gross Profit Margin
- Cash Runway
- Customer Acquisition Cost
- EBITDA
These numbers give investors a clear view of your business.
1. Revenue Growth Rate
Revenue growth rate shows how quickly your income increases over time. Investors use this metric to understand customer demand. They also use it to review your business growth.
The formula is:
Revenue Growth Rate = (Current Revenue – Previous Revenue) ÷ Previous Revenue × 100
For example, your business earned $400,000 in 2025. Your business earns $600,000 in 2026. Your revenue growth rate is 50%.
Strong growth shows that customers value your product or service. It also shows that your business attracts new opportunities. Investors prefer consistent growth over short periods of high sales. A single month of strong revenue does not show the full picture. A clear growth pattern over 12 months gives better information. Track your revenue every month. Compare your current results with previous periods.
Review where your sales come from. Look at your products, services, and customer groups. This information helps you understand your strongest income sources. Before raising capital, prepare a revenue report. Show your sales history and explain your growth patterns. Investors want to know how your business has performed. They also want to understand your future sales plans.
2. Gross Profit Margin
Revenue shows your income. Gross profit margin shows how much money remains after direct costs. Direct costs include expenses linked to making your product or delivering your service.
The formula is:
Gross Profit Margin = (Revenue – Cost of Goods Sold) ÷ Revenue × 100
For example, your business earns $1 million in revenue. Your direct costs equal $400,000. Your gross profit is $600,000. Your gross profit margin is 60%.
A strong margin gives your business more money to cover daily expenses. These expenses include wages, rent, software, and marketing. A low margin creates pressure. Your business needs more sales to cover costs. Investors review margins because they show pricing strength and cost control. Review your margins often. Supplier prices and operating costs change over time.
Small improvements can create better results. You can review supplier agreements, pricing, and product costs. Before raising capital, understand your margin for each product or service. Some products create strong profits. Other products may reduce your overall results. This information helps investors understand your business model.
3. Cash Runway
Cash runway shows how long your business can operate with its current cash balance. Cash flow is one of the most important areas for growing businesses. A company can have strong sales and still face cash problems.
The formula is:
Cash Runway = Available Cash ÷ Monthly Cash Burn
For example, your business has $500,000 in cash. Your monthly expenses exceed your income by $50,000. Your cash runway is 10 months.
Investors review this number before investing. They want to know how you manage your available funds. A short runway creates pressure. A longer runway gives your business more time to reach goals. Track your cash balance every month. Review upcoming payments, expenses, and customer invoices. Create a cash flow forecast before you raise capital.
Your forecast should show your expected income and expenses. It should also show how you plan to use investment funds. Investors want clear information about your spending plans. Good cash management shows financial discipline.
4. Customer Acquisition Cost
Customer acquisition cost shows how much money you spend to gain one new customer.
The formula is:
Customer Acquisition Cost = Total Sales and Marketing Costs ÷ Number of New Customers
For example, your business spends $60,000 on sales and marketing. You gain 600 new customers. Your customer acquisition cost is $100.
This number helps you understand your marketing performance. A business needs customers to grow. But gaining customers at a high cost can reduce profits. Investors compare customer acquisition cost with customer lifetime value. Customer lifetime value shows how much revenue a customer creates over time. For example, spending $100 to gain a customer who spends $1,000 is a strong result.
Track your customer acquisition cost by marketing channel. Compare online advertising, referrals, partnerships, and sales campaigns. Find which methods bring valuable customers. Before raising capital, understand your customer growth process. Investors want to see that your business can attract customers in a cost-effective way.
5. EBITDA
EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It shows the profit your business makes from normal operations.
The formula is:
EBITDA = Revenue – Operating Expenses
For example, your business earns $2 million in revenue. Your operating expenses equal $1.5 million. Your EBITDA is $500,000.
Investors use EBITDA to review business performance. A positive EBITDA shows that your operations generate profit. A negative EBITDA shows that your business spends more than it earns from operations. Some businesses invest heavily during early growth stages. Investors still need to understand your costs and future plans. Review your operating expenses regularly.
Common expenses include wages, rent, software, marketing, and professional services. Small cost changes can improve your results. Keep accurate financial records. Investors often review EBITDA during the investment process. Reliable numbers help investors understand your business performance.
Why These Metrics Matter Before Raising Capital
Investors need clear financial information before investing in a business. These five metrics show different parts of your company. Revenue growth shows sales performance. Gross profit margin shows pricing and costs. Cash runway shows financial control. Customer acquisition cost shows growth spending. EBITDA shows operating profit.
Together, these metrics create a clear picture of your business. They also help you prepare for investor discussions. Investors often ask about revenue trends, expenses, customer growth, and future plans. Strong financial records help you answer these questions.
How Atlas CA Helps Businesses Prepare for Capital Raising
Preparing for investment starts before your first investor meeting. Your bookkeeping should stay current. Your financial reports should show accurate information. You should know your monthly revenue, expenses, cash position, and profit results. Regular financial reviews help you understand your business better. They also help you identify areas that need attention.
At Atlas CA, we support Australian businesses with accounting, financial reporting, cash flow planning, and business advice. Clear financial information helps founders approach capital raising with better preparation. Understanding your numbers is the first step toward building investor confidence.