kellblog.com · 2019-01-30
· 2682d
Rule of 40 Glideslope Planning: A Long-Term SaaS Growth Framework
This article reframes the Rule of 40 metric from a binary compliance question to a multi-year glideslope planning tool for SaaS companies. Rather than targeting Rule of 40 compliance by IPO, companies should define their desired trajectory and use it as a self-correcting mechanism for balancing growth and profitability while managing expense planning risk.
Metrics in this report
Customer Acquisition Cost Ratio
1.32$ spent per $ ARR
median
Enterprise SaaS companies
Customer Acquisition Cost Ratio - 75th Percentile
1.92$ spent per $ ARR
75th percentile
Enterprise SaaS companies
Rule of 40 Score
31%
median
Public SaaS companies
Rule of 40 Score
87%
at IPO
Elastic (exceptional case)
Time to IPO
14years
median
Enterprise SaaS companies
Total Capital Raised Before IPO
300$ millions
median
Enterprise SaaS companies