Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

Statistic Info

When we looked at the fastest growing SaaS companies in our study (those with a CAGR of over 50%) we found an average Quick Ratio of 3.9.

These SaaS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn. They are, in other words, exactly the type of SaaS startup that Mamoon looks for when deciding where to invest.

And, as their high Quick Ratio implies, they have a great chance to continue growing quickly and healthfully, and eventually become one of those fabled SaaS companies with a run rate of more than $10 million.

More SaaS + Software Stats

High-growth companies generate 60% fewer sales opportunities than low-growth companies

Three uses for the SaaS Guidelines

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

Negative Churn and Expansion Revenue

56% treat “Existing Customer Renewals” as high priority

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

How To Make Pricing A Constant Process In Your Organization

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

How Often Should The Pricing Committee Be Meeting And Making Changes?

More Growth Strategy Stats

The median annual unit churn for SAAS companies was 10% in 2016

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

Internet Sales strategies have a significantly lower CAC of just $0.42

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

56% treat “Existing Customer Renewals” as high priority