VC & PE Glossary
What Is OKR?
Updated
Definition
OKR — objectives and key results — is a goal-setting framework where teams define qualitative objectives and measure progress with specific, time-bound key results.
Useful for: Founders, Investors
OKR (objectives and key results) is a planning rhythm that pairs inspirational objectives with quantifiable key results — popularized in tech companies and common in venture-backed board reporting.
How it works
Company-level OKRs cascade: CEO sets three to five objectives per quarter; teams draft contributing KRs. Example objective: “Win mid-market security buyers.” Key results: close five $100K+ pilots, ship SSO, cut sales cycle from 90 to 60 days. Scoring is typically 0.0–1.0; many teams target ~70% achievement to preserve stretch goals.
OKRs differ from KPIs: KPIs monitor ongoing health (burn, uptime); OKRs drive change in a period. Good OKRs link to the north star metric without duplicating every dashboard number.
Cadence includes kickoff, mid-quarter check-ins, and retrospective — often shared with the board minus sensitive HR or M&A items.
Why it matters
- Founders: OKRs reduce thrash when everyone ships urgent requests — if it does not advance a KR, defer it. Avoid tying OKRs directly to compensation every quarter; that encourages sandbagging.
- Investors: Pattern of missed OKRs across quarters signals execution gaps; consistent delivery builds confidence to support insider rounds.
Common mistake
Writing key results as task lists (“Launch feature X”) instead of outcomes (“Increase activation from 30% to 45%”). Tasks belong in project plans, not OKRs.
Related ideas
See also north star metric, KPI, operating plan, and quarterly business reviews.
Related terms
- KPI — A KPI — key performance indicator — is a measurable metric tied to a specific business goal, used to track whether a company is on track and to align teams and investors on what "good" looks like.
- North Star Metric — A north star metric is the single core measure that best captures the value a product delivers to customers — aligning teams on what growth or improvement most drives long-term success.
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Common questions
Short answers for founders, LPs, and operators