{"id":2098,"date":"2019-03-12T18:48:01","date_gmt":"2019-03-12T13:18:01","guid":{"rendered":"https:\/\/pitch.link\/blog\/?p=2098"},"modified":"2019-06-07T18:51:56","modified_gmt":"2019-06-07T13:21:56","slug":"more-data-on-the-rule-of-40","status":"publish","type":"post","link":"https:\/\/pitch.link\/blog\/more-data-on-the-rule-of-40\/","title":{"rendered":"More data on the Rule of 40"},"content":{"rendered":"\n<p class=\"has-drop-cap\"><a href=\"https:\/\/pitch.link\/blog\/the-40-rule-of-saas-and-why-you-should-get-there\/\">January 29th I wrote about the Rule of 40<\/a>. The reference was to posts in 2015. There is new data in Piper Jaffray\u2019s 2018 Software Market Review which was analyzed by Dave Kellogg.  <\/p>\n\n\n\n<!--more-->\n\n\n\n<p>Piper\u2019s chart that plots R40 score against enterprise value \/ revenue. <\/p>\n\n\n\n<p>Amongst the findings &#8211;  <br>&#8211; Less than half of all companies in this set are Rule 40 compliant; The median R40 score was 31.7% <br>&#8211; The median multiple for companies in the set was 6.6x <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/media.licdn.com\/dms\/image\/C5122AQFhuwBH4oRYoQ\/feedshare-shrink_8192\/0?e=1562803200&amp;v=beta&amp;t=Qc3L-69XZtF7Ua6tL4x9KfdtWYlrcVDllAwQ-N2ajgc\" alt=\"More data on the Rule of 40 \"\/><\/figure><\/div>\n\n\n\n<p>\u2018Early stage startup executives misapply these charges forgetting the selection bias within them\u2026..The big question around the Rule of 40 is: when should companies start to target it?   A superstar like Elastic had 76% growth and 8% FCF margin so a R40 score of 84% at its spectacular IPO.  However, Avalara had 26% growth and -28% FCF margin for an R40 score of -2% and its IPO went fine.  Ditto Anaplan.\u2019 observes Dave.  <\/p>\n\n\n\n<p>If this interests you read the whole post. It has some very interesting points.  Link in the first comment.  <\/p>\n\n\n\n<p>I will keep looking for more such analysis and bring them to your notice from time to time.  <\/p>\n\n\n\n<p>Link to Dave\u2019s post An Update on the SaaS Rule of&nbsp;40\n <a rel=\"noreferrer noopener\" target=\"_blank\" href=\"https:\/\/bit.ly\/2Hv5v7a\">https:\/\/bit.ly\/2Hv5v7a<\/a>\n<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>January 29th I wrote about the Rule of 40. The reference was to posts in 2015. There is new data in Piper Jaffray\u2019s 2018 Software Market Review which was analyzed by Dave Kellogg.<\/p>\n<\/p><div class=\"more-link\"><a href=\"https:\/\/pitch.link\/blog\/more-data-on-the-rule-of-40\/\" class=\"btn btn-small btn--dark btn-hover-shadow\"><span class=\"text\">Continue Reading<\/span><i class=\"seoicon-right-arrow\"><\/i><\/a><\/div>","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"inline_featured_image":false,"ub_ctt_via":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[68,69],"tags":[],"class_list":["post-2098","post","type-post","status-publish","format-standard","hentry","category-saas","category-what-i-learnt-today"],"aioseo_notices":[],"featured_image_src":null,"author_info":{"display_name":"Subhanjan Sarkar","author_link":"https:\/\/pitch.link\/blog\/author\/subhanjan\/"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paX7jg-xQ","_links":{"self":[{"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/posts\/2098"}],"collection":[{"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/comments?post=2098"}],"version-history":[{"count":0,"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/posts\/2098\/revisions"}],"wp:attachment":[{"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/media?parent=2098"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/categories?post=2098"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pitch.link\/blog\/wp-json\/wp\/v2\/tags?post=2098"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}