IVP: The Average SaaS Magic Number is 1.2
SaaStr
NOVEMBER 5, 2021
The “Magic Number” is one of those metrics in SaaS that has always sort of vexxed me. On the one hand, you need a shorthand for your sales and marketing efficiency — and that’s Magic Number. Magic Number is your growth in ARR over a quarter divided by the sales and marketing spend in the prior quarter. Generally, anything >1 is seen as healthy if you are venture backed, and anything > 1.5 is often seen as perhaps too capital efficient.
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