SaaS Quick Ratio
Growing your revenue fast is great but the majority of people in the SaaS industry knows that high churn and lack of account expansion can kill even the fastest growing companies.
If you grow fast but don’t manage to keep your customers it’ll be extremely complicated to scale.
This is where the SaaS Quick Ratio comes in handy.
SaaS Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)
A SaaS Quick Ratio superior to 4 will excite VCs, between 2 and 4 a bit less but still ok and below 2 it won’t interest them.
Most relevant during:
PMF phase
GTM Fit phase
Scale phase
Most relevant for:
ACVs < $15K
ACVs $15K-$50K
ACVs > $50K
