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In the first 3 years, these public SaaS companies spend between 80 to 120% of their revenue in sales and marketing (using venture dollars or other forms of capital to finance the business). By year 5, that ratio has fallen to about 50% where it remains for the life of the business.

Despite the divergent revenue ramps, the marketing and sales spend patterns for these companies resemble each other strongly and serve as good benchmarks for high-growth SaaS startups.

In case you’re curious, below is the “typical” revenue growth trajectory for these SaaS companies: $50M in year five, $100M in year ten.

Tomasz Tonguz

More SaaS + Software Stats

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

56% treat “Existing Customer Renewals” as high priority

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

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

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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

More Growth Strategy Stats

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

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

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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

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

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million