Rule of 40
Balances growth vs profitability at scale ($50M+ rev).
- Formula
- Revenue growth % + profit margin % >= 40
- Unit
- pts
- Models
- SaaS, Usage-based, Subscription
Benchmark
As of 2026
| ALL | Cloud Index avg ~31%, top-decile ~48%. EBITDA basis: only ~15% clear it; FCF basis ~46%. Margin basis swings result ~16pts - always specify. | Brad Feld (2015); Bessemer Rule of X; Aventis 2026 |
Omega Point BenchmarksGlobal / Financial