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The top SAAS companies have a LTV to CAC (the Cost to Acquire a typical Customer) ratio that is higher than 3

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More SaaS + Software Stats

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

When venture capitalists participate in seed rounds, the average round size is 3x larger

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

More Growth Strategy Stats

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

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

Negative Churn and Expansion Revenue

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

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

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

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