The SaaS Metrics That Matter - Deepstash

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The SaaS Metrics That Matter

sacks.substack.com

1. Growth

  • MRR or ARR: For startups seeking a Series A funding round, the old benchmark used to be $1 million in ARR. But recently, the threshold has been around $500k ARR, as rounds get preempted and happen earlier.
  • Compound Monthly Growth Rate (CMGR): For sta...

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2. Retention

  • Dollar Retention / Net Revenue Retention (NRR): measures how much revenue a cohort is generating in each period relative to its original size.
  • Logo Retention: measures the percent of customers that stay active (non-churned).

Logo Retentio...

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3. Sales Efficiency / Unit Economics

  • New Sales ARR vs S&M Expense: How much did S&M departments (all programs and personnel) spend vs how much New Sales ARR was added in the same period. 
  • CAC: divides S&M expense in the preceding period (month or quarter) by the number of new customers ...

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4. Margins

  • Gross Margin: reflects a company’s margin after subtracting the cost of goods sold (COGS) from revenue. In the long-term, SaaS companies should have a Gross Margin of at least 75%.
  • LTV: is the cumulative gross profit contribution, net of CAC, of the ...

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  • Burn Multiple: a company’s Net Burn divided by its Net New ARR in a given period. For fast-growing SaaS companies, a Burn Multiple of less than one is amazing, but anything less than two ...

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  • DAU/MAU: A good metric for most SaaS startups is 40% DAU/MAU during non-holiday weekdays.
  • DAU/WAU: A good metric for most SaaS startups is 60% DAU/WAU during non-holiday weekdays

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Send company metrics through SaasGrid to be considered for an investment.

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