< Back to Blog

The ok level of SaaS burn

Of the 62 SaaS businesses that have gone public which we follow, 51 of them were not profitable at the time they went public; that’s 82%. Clearly a certain level of burn is ok so long as you’re growing, but what is that level? Can you lose $1 for every $1 of revenue? Can you lose $2? Can you lose more? The answer to that question is below.

Of the 51 unprofitable SaaS companies that have gone public, on median they burned only -$0.27 for every $1 of revenue and on average the loss was -$0.31 for every $1 of revenue. For the 11 SaaS business that have IPO’d since January 2018, the average burn was also -$0.31 for every $1 of revenue.

In summary, so long as you’re growing fast and there is a clear path to profitability, burning about $0.30 for every $1 of revenue is acceptable. Otherwise, you’re WeWork.

Visit us at blossomstreetventures.com and email us directly with Series A or B opportunities at sammy@blossomstreetventures.com. We invest $1mm to $1.5mm in growth rounds, inside rounds, cap table restructurings, note clean outs, and other ‘special situations’ all over the US & Canada.