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

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.

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• What Is MRR
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• How to Determine a Test Pricing Strategy for Your SaaS Product
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• The Importance of a Business Plan
  Before you can begin putting together an effective marketing plan, it’s important to make sure you have a business plan in place. Today Andy talks about understanding the long term and short term goals and objectives of your business, before you start planning your marketing. One of the things I wanted to talk about today […]
• 7 Ways to Use Digital Sales Rooms for Killer Closing
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• Social Media Trends for B2B SaaS Brands
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• The Culture Gap
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• How To Get a Head Start on Marketing Your Product
  When developing a new product or service many people don’t think to begin their marketing ahead of time. Doing this can greatly increase your chances for success. In this insight Andy shares a few ways you can get your product out to your audience before it launches. Did you like this insight? Make sure you […]
• Personas and The “Broken Telephone” Game
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SaaS + Software Stats

• More than 1/2 of SAAS companies increased their spending on customer retention last year
• The median annual unit churn for SAAS companies was 10% in 2016
• Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate
• The fastest growing SaaS companies raise an average of $9.5M in Series A funding
• The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year
• Investment in marketing automation tools is expected to reach $25 billion by the year 2023
• SaaS IPOs have more than doubled over the last 12 years
• A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses
• SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

SaaS & Tech Growth Strategy Stats

• SaaS organizations are now operating in over 100 countries
• The fastest growing SaaS companies raise an average of $9.5M in Series A funding
• If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth
• Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc
• Google only has a 30 percent female workforce
• Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts
• SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer
• Cloud application services are expected to grow at an average annual rate of 18.5% through 2025
• If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn