Startup finance benchmarks with named sources
Compare your metrics with published reference ranges, then check the company stage and definition behind each one. These benchmarks come from outside sources and rules of thumb, rather than Plainhub customer data. Use them to frame a question about your business, not to set a target without context.
Every row links to the full definition with its formula and a worked example. Metrics with no range that holds across markets, like CAC, have no row.
ARR
ARR = MRR × 12The venture-scale reference is T2D3: from about €1M ARR, triple it twice, then double it three times, reaching €100M around year five (Neeraj Agrawal, 2015).
Burn multiple
burn multiple = net burn / net new ARRUnder 1x exceptional · 1 to 1.5x great · 1.5 to 2x good · 2 to 3x suspect · above 3x trouble past seed.
Source: David Sacks, “The Burn Multiple” (Craft Ventures, 2020)
CAC payback period
CAC payback = CAC / (ARPA × gross margin)Under 12 months is generally considered healthy for SaaS.
Churn rate
customer churn = customers lost / customers at startSMB SaaS commonly runs 3 to 5 percent monthly. Products sold to larger companies target under 1 percent.
Gross margin
gross margin = (revenue − cost of revenue) / revenueSoftware businesses typically run 70 to 85 percent. Services and hardware run considerably lower.
No linked source: treat it as a common rule of thumb.
LTV:CAC ratio
LTV : CAC = lifetime value / customer acquisition cost3:1 is the widely used target. Below 1:1 every customer loses money. Above 5:1 often means underspending on growth.
MRR
MRR = number of active accounts × average revenue per accountPaul Graham's yardstick for YC-stage startups: 5 to 7 percent growth a week is good, 10 percent is exceptional. Most companies at that stage measure it on MRR.
Net revenue retention
NRR = (starting MRR + expansion − contraction − churn) / starting MRRAbove 100 percent means the existing base grows without new customers. Best-in-class B2B SaaS reaches 120 percent or more.
Plainhub flags a top customer at 30 percent or more of MRR. This is its own warning threshold, not a universal industry standard.
No linked source: treat it as a common rule of thumb.
Rule of 40
Rule of 40 score = revenue growth rate (%) + profit margin (%)40 is the reference line. Brad Feld described the rule for SaaS companies at scale, citing $50M in revenue and his experience from about $1M of MRR. Small-base growth makes it less useful for early startups.
Source: Brad Feld, “The Rule of 40% For a Healthy SaaS Company” (2015)
Runway
runway (months) = cash on hand / net monthly burnMost investors expect 18 to 24 months after a round. Below 6 months you are raising from a weak position.
No linked source: treat it as a common rule of thumb.
SaaS magic number
magic number = (this quarter's revenue − last quarter's revenue) × 4 / last quarter's S&M spendLars Leckie, who coined the metric, drew the lines that are still used: above 0.75, keep investing in the go-to-market; below 0.5, fix the model before spending more; in between, look deeper before deciding.
No linked source: treat it as a common rule of thumb.
SaaS quick ratio
quick ratio = (new MRR + expansion MRR) / (churned MRR + contraction MRR)Mamoon Hamid, who introduced the metric in 2015, set 4 as the bar for a healthy early-stage SaaS company. Below 2, growth is a treadmill: most of what sales wins, churn takes back.
No linked source: treat it as a common rule of thumb.
Ranges like these describe the companies their authors looked at, usually venture-backed software companies, often in the US. A services business, a hardware company or a bootstrapped one can sit outside them and be fine. To cite a range, link the anchor on the glossary page, next to the formula and the source.
Your own numbers, kept live
Plainhub calculates current runway, burn, MRR and customer concentration from records you maintain. Use your own period history for growth and efficiency ratios, with the free calculators linked above. Start your model with seven questions and see a first runway estimate before choosing a paid plan.