The Most Important Investment Metric in Hard Tech

It's not revenue.

For Hard Tech companies, the only metric that matters before Series B is the 'Speed of Hiring Impressive People', aka the "SHIP" rate. Here’s a visual, where we’re assuming all the hires are, in fact, “Impressive”:

Why is the SHIP rate important?

Traditional metrics that drive legibility for growth capital (revenue, margin, NPS, etc.) occur several years into a Hard Tech company's life cycle. This makes near-term investment scarce relative to traditional venture sectors, except from investors who have gotten comfortable that the SHIP rate is all that matters.

Why is the SHIP rate all that matters?

The biggest Hard Tech opportunities will require significant growth capital to realize their full potential. Achieving clear legibility for growth capital requires investing in the headcount that will build the product or service that unlocks real revenue.

There's no way around this.

The FASTER one can hire the BEST people, the SOONER they become default investable for a wider investment universe. Getting to this point is when the $10B+ EV opportunities are truly unlocked.

If hiring is slow or hard, it's a near insurmountable headwind. This is especially true if you raise too much money, too fast and lose market momentum.

For VCs used to seeing revenue and growth milestones in years 1-3 of a business, this is a painful reality. It takes a while to get comfortable with the reality that early on, the SHIP rate is all that matters.

But I promise...it works.