SaaS Growth Efficiency Calculator

A free tool for SaaS founders preparing a board deck, an investor update or a raise. Enter one quarter's numbers and it computes the four efficiency numbers investors ask about: magic number, burn multiple, Rule of 40 and CAC payback. Each is read against what its source actually wrote, with the source linked, and the tool says which to fix first.

The four numbers and their sources

Magic number: this quarter's recurring revenue minus last quarter's, times four, divided by last quarter's sales and marketing expense. Read against Rory O'Driscoll, Scale Venture Partners, Magic Number Math (2010): above 1x is a compelling business investment; below 0.5x, the company has not yet figured out its model; in between, it will probably reach success and cash-flow break-even, but in a relatively capital-inefficient way. The 0.75 threshold often quoted is not in that post.
Burn multiple: net burn divided by net new ARR, same quarter. Read against David Sacks, The Burn Multiple (2020): at 3x or more, a company needs extraordinary investment, and product-market fit may not be what it appears to be, or there is some other problem in the business; 5x is terrible; over time it should fall toward 0. His 2x and 3x stage figures are worked examples, and the tool treats them as examples, not cut-offs.
Rule of 40: revenue growth plus profit margin over the last 12 months should total at least 40%. Popularised by Brad Feld in The Rule of 40% For a Healthy SaaS Company (2015), who credits an unnamed late-stage investor and prefers EBITDA as the profit measure.
CAC payback: last quarter's sales and marketing expense times twelve, divided by net new ARR times gross margin, in months. Bessemer Venture Partners' 10 Laws of Cloud (2019) defines payback only in words, so this formula is AAJ's construction. Bessemer gives about 6 to 18 months for SMB customers and as long as 24 to 36 for enterprise; beyond 36 months, growth is often hard to fund unless customer lifetime value is exceptionally high.

What to fix first

This is AAJ's view, not the sources'. Fix go-to-market efficiency first, then burn, then the Rule of 40. If new revenue does not pay back sales and marketing spend, spending more only raises the burn. The Rule of 40 is the outcome of the other two. Net new ARR defaults to the quarter's revenue change times four; if you enter your own and it differs by more than 25%, the tool flags it (AAJ's rule).

Why I read each number against its source

Each of these metrics has picked up thresholds its source never wrote. So the calculator quotes what each source actually said, links it, and adds no cut-offs of its own. You can check every reading yourself.

Limits

One quarter can mislead. A big renewal, a price change or a one-off deal moves every number; read the trend over several quarters.
The sources wrote about venture-backed SaaS. A bootstrapped or services-heavy business may reasonably sit elsewhere.
Use recurring revenue only. Services and one-off fees inflate every number.

The same engine runs as an agent skill, saas-growth-efficiency. For LTV, CAC and payback by customer, use the Unit Economics Calculator. For the monthly report these numbers sit in, use the Marketing KPI Report.

Run this in your agent

The free AAJ agent skill SaaS Growth Efficiency does this job inside a coding agent, on your own data. Install it with npx skills add sarojkjha/aaj-marketing-skills --skill saas-growth-efficiency.

Using Claude or ChatGPT instead? Add the AAJ engines as a custom connector, with no install: https://aaj-engines-mcp.sarojkjha10.workers.dev/mcp