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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

How To Make Pricing A Constant Process In Your Organization

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

Companies with longer contracts (2+ years) reported the lowest annual unit churn

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

SaaS IPOs have more than doubled over the last 12 years

More Growth Strategy Stats

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%”

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

Is your SaaS business viable?

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%