How much cash can your SaaS co burn?
NOVEMBER 26, 2019
Cash efficiency is one of our favorite metrics in SaaS. Measured as recurring revenue in the latest year / equity + debt invested, it’s every bit as important as growth. We did an analysis looking at the revenue, equity, and debt of 88 publicly traded SaaS companies at the time they went public. Using the equation above (revenue/[equity invested + debt]), we were able to observe the cash efficiency of each company. The conclusion: if you can generate $0.58 cents of revenue each year per $1.00