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Hey {{first_name}} 👋, hope you had a great week! In the last issue, we discussed why tracking Burn Multiple matters, and now we are moving with the next topic from Financial Metrics content.

Let’s talk about ⬇️

Most SaaS founders think you need a massive funding round to build a sustainable business.

But after analyzing hundreds of SaaS companies across every growth stage, I can tell you nothing is further from the truth.

In reality, you ONLY need to track these 5 capital efficiency metrics:

And today, I want to walk you through how each one works — so you can finally grow without burning through cash recklessly.

Let's dig in:

1️⃣ Core Turnover Math (what’s actually changing)

2️⃣ Retention Health (how well you keep who you hire)

3️⃣ Hiring Dynamics (where churn really lives)

4️⃣ Cost & Productivity (translate people into dollars)

5️⃣ Engagement & Risk (leading indicators)

The goal of this metric is to measure your current ROI on every dollar raised.

Developed by Bessemer Venture Partners, it's the go-to efficiency benchmark for SaaS companies at any stage. Calculate it by dividing your current ARR by total capital raised minus cash on your balance sheet.

Scores range from 0.25x (good) to 1.0x+ (best-in-class). If you don't know your score today, that's the first thing to fix.

The goal of this metric is to measure how efficiently your entire business converts spending into growth.

Introduced by David Sacks of Craft Ventures, it's calculated by dividing net burn by net new ARR. Unlike CAC-based metrics, it reflects the efficiency of every team — not just sales and marketing.

Lower burn multiple = higher efficiency. Track it monthly so you can catch problems before they become crises.

The goal of this metric is to show what percentage of your capital is being returned as profit.

It's calculated by dividing EBIT by capital employed — and it's best suited for later-stage or public companies. If you're sitting on large unused cash reserves, pair it with return on invested capital and return on assets for a fuller picture.

The goal of this metric is to give early-stage startups a simple, actionable growth benchmark.

Divide net new ARR by net burn. A score above 1.5x is best-in-class. Below 0.5x means growth is costing you more than it should — and it's time to investigate why.

Track this quarterly to see whether your efficiency is improving as you scale.

Alright, we're almost done. But this last one is worth paying close attention to.

The goal of this metric is to measure how much of your capital is turning into real revenue vs. just buzz.

Divide capital raised by ARR. A ratio of 1–3 is healthy. Above 5 means there's far more hype than substance behind your growth story — which is a problem when investors start digging.

Pre-IPO companies should aim to drive this ratio as close to zero as possible.

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

And that's it! Hope you find these helpful.

If you have any capital efficiency questions, hit reply and let me know — I'm here to help :)

Chat soon,

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