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I tend to agree more with Benjamin.  We all need feedback and recognition.  That is difficult to provide if we do not measure the important things.  That isn't just about profit.  Whilst that may be an aspect, the skills and knowledge of your people need to be recognised and how they contribute to outcomes (such as profit).  Communication is vital and I agree with Benjamin that a regular - possibly weekly - meeting with each staff member helps to ensure communication is kept open.  Just 30 minutes is all it takes.  Increase or reduce the time and frequency as necessry.

It is at these meetings where performance can be discussed - also where you can find out in a casual and relaxed approach what may be causing any issues.  These may not be directly relating to performance althoiugh could be impacting that.  For example personal issues outside of work.

The days of annual appraisal are gone (thankfully) the era of continuous improvement is here.  It is about managing the performance of each individual for their benefiit and that of your organisation and ultimately those you serve.  'Performance Management' is a term oftern used to imply or suggest moving a person out of a role for poor performance.  Surely as a leader it is our responsibility to help manage everyones' performance so they can be their 'best self'.

Hi Ling, without knowing what your startup is about, my comments are pretty general. Therefore, it depends. Amongst many other things, it depends on what industry you're in, what the scalability potential is like and how much skin the founders have in the game.

The first and most obvious thing to say is: they expect a return. And that mighty quick.

My experience preparing business plans for VC investment taught me several things – the most important being:

1. your idea is worth precisely zero until it is implemented. Investors want to see a working model.

2. investors are taking a big risk, therefore will expect a big return. After all, if your startup is not doing something that's never been done before, by definition it's just another business. And if all you need is money, go to the bank. So expect them to ask for at minimum, 30% return over 3 x years on say, $1mill.

3. investors are most interested if you can clearly show your three different customers. If you can define these three distinct groups early on, you stand a better chance of growth and a better return on exit. A wiser man than me defined them thus:

Customer One is your end-user. It is to serve her needs that your business was created. Without this customer, you don't have a business.

Customer Two is your bulk-buyer. This second customer is the one on whom rapid expansion will pivot, based on the idea that it's easier to sell to one who buys 1,000 than it is to sell to 1,000 who only buy one (customer 1). This customer shapes the speed and scale of growth.

Customer Three is the business buyer. This is the entity that will eventually buy your business. This individual or company will ultimately make more from your assets (customers, database, products) than you can. This customer shapes your positioning, your customer information collection, your database. And this customer is the most difficult to identify.

But it's this last customer the VCs are most interested in, because that's where the greatest value lies. If you can demonstrate a firm grasp of how each customer group is linked, you can argue a simple and very powerful case for investment.

Everything else is just logistics.

Ask Neil at Wardour Capital about this stuff. He is the expert.

In extension to the statements above, it is very important that the business owner/strategist has a process to measure the success or failure that is accomplished. 

A gut feeling is simply not good enough. 

Most accounting software has basic methods to assist. 
Quickbooks has a Class / Location
Xero has tracking categories
Myob has locations/jobs 

Using a client's example:
A beautician has three clinics with 20 packages of services and skincare products
Using Quickbooks as an example she creates three store locations 
Ipswich
Moorooka
Chermside
Then the 20 packages are tracked using "class" 
She also mapped all her product sales against the appropriate clinic locations. 

After three months the beauty salon owner discovered some surprising insights:
Ipswich sold mostly massage/waxing packages and in skincare, acne packages were the most popular
Moorooka did not break even in services or products, it was hemorrhaging losses.
Chermside clients loved the higher end packages and skincare products. 

With this information, the beautician closed the Moorooka clinic, as the lease was due to be renewed. 
A new product line of aromatherapy essential oils and massage goods were introduced to Ipswich.
The money she saved in rent by closing Moorooka went into more modern laser machinery and expanded the store in Chermside. 

Knowledge is power. 
Research, customer feedback, advertising/marketing, website SEO, blogging all work together well as long as you have processes in place to document their success or failure.