Net revenue retention and 3 things every venture capitalist looks for

Net revenue retention (NRR) measures the percentage of recurring revenue retained from existing SaaS customers over a period, including losses from cancellations and downgrades as well as gains from upgrades, cross-sales, and price increases, making it a major indicator for investors assessing customer stability and growth potential. An NRR above 100% suggests that expansion revenue exceeds losses and can support growth even without new customers, while gross revenue retention (GRR) excludes expansion revenue and provides a stricter measure of customer retention, always remaining at or below 100%. Investors commonly seek NRR of at least 100%, GRR roughly between 75% and 90%, and low customer churn, since a high NRR paired with low GRR can indicate that upselling is masking significant customer losses. SaaS companies can improve NRR by segmenting customers, tailoring support models to customer value, monitoring usage and satisfaction data to identify expansion opportunities or risks, and investing in customer-success efforts tied to renewals and expansion revenue.

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