Brief Analysis (SaaS): Rule of 40

Rule of 40 for SaaS companies is a useful metric for private equity investors and strategic buyers to measure the performance of SaaS companies. Allied Advisers’ reports shows that companies which exceed 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 investors to keep in mind as they build their companies.

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