Rule of X SaaS Calculator
Rule of X is the modern upgrade to Rule of 40 — it weights revenue growth roughly 2x heavier than free cash flow margin to match how public SaaS investors actually value companies. Get your X score and benchmark against the cloud index.
| Growth × multiplier | — |
| FCF margin | — |
| Rule of X total | — |
The Rule of X — introduced by Bessemer Venture Partners — replaces the older Rule of 40 by weighting revenue growth approximately 2× heavier than free cash flow margin. This better matches how public SaaS investors valued companies in 2023–2025: top-decile multiples went disproportionately to growth, not profitability.
Rule of X vs Rule of 40
Rule of 40 = Growth% + Margin%. Rule of X = (Growth% × 2) + Margin%. A 30% grower with 10% margin scores 40 on Rule of 40 but 70 on Rule of X — and the X score better predicts EV/Revenue multiples in public SaaS data from 2018–2024.
Why 2× Growth Weighting?
Bessemer's analysis found that 1% of growth was worth roughly 2× as much as 1% of FCF margin in market caps. Some bankers use 3× during boom periods (2020–2021) and 1.5× in downturns. The standard reference multiplier is 2×.
Top-Decile Benchmarks
Top-decile public SaaS sustained Rule of X above 70 from 2018–2022. Median sat around 30. Below 10 typically signals a stalled grower with margin problems — a no-fly zone for growth investors.
Last updated May 2026. Sources: Bessemer Rule of X, Scale Venture Partners.