…and how does it impact valuation?
The Rule of 40 for SaaS companies is a useful metric for private equity investors and strategic buyers to measure the performance of SaaS companies. The Allied Advisers’ reports shows that companies which exceed the Rule of 40 tend to trade at premium valuations compared to companies that do not.
The Rule of 40 is a good metric for founders and entrepreneurs to keep in mind as they build their companies into global leaders.
Allied Adviser’s Rule of 40: A Brief Analysis