What's a Good Rule of 40 for a Seed SaaS? (2026)
Directional 2026 median · Seed SaaS
~40%
Growth % + profit margin % should clear 40% for an efficient SaaS.
The directional Seed median is ~40%, compared with Bootstrapped (~40%), Series A (~40%), Series B+ (~40%). Higher is better for this metric.
Benchmarks here are directional medians synthesized from public 2024–2025 SaaS reports (Rule of 40 (Brad Feld / Bessemer)); definitions vary between reports, so compare like-for-like.
The full Rule of 40 bands
| Bootstrapped | Seed | Series A | Series B+ |
|---|---|---|---|
| ~40% | ~40% | ~40% | ~40% |
How to improve your Rule of 40
- Below 40 with high growth: fine — but know your burn multiple and runway.
- Below 40 with low growth: cut S&M that isn’t converting (check your magic number).
- Use FCF margin, not EBITDA, for the honest version investors compute.
Calculate your Rule of 40 — Rule of 40 Calculator
Free, instant, judged against these exact bands