SaaS Rule of X Calculator
Calculate Bessemer's Rule of X — growth-weighted profitability metric. Score = 2× growth + FCF margin. Higher than Rule of 40.
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| Weighted growth (weight × growth) | — |
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Bessemer Venture Partners' Rule of X is the modern successor to Rule of 40. It weights growth more heavily than profitability — recognizing that early-stage SaaS value compounds with growth. The standard formula: Rule of X = (2 × growth %) + FCF margin %.
Why Bessemer Created Rule of X
Rule of 40 (growth% + profit% ≥ 40) treats growth and profit equally. But at scale, $1 of growth compounds into far more enterprise value than $1 of FCF. Rule of X recognizes this by weighting growth 2× (or higher for very early stage).
Benchmarks 2024-2025
Bessemer State of Cloud: median public SaaS = 40 Rule of X. Top quartile = 60. World class = 100+. For ARR < $50M, world class > 200 (hypergrowth weighted heavily). For ARR > $500M, world class drops to 80+ as growth naturally slows.
Growth Weight by Stage
Seed-Series A: 3× weight (growth is everything). Series B-C: 2× weight. Late-stage / public: 1.5×. Mature / dividend-paying: 1× (= Rule of 40). Match weight to your stage to compare apples to apples.
Limitations and Critique
Doesn't account for unit economics quality (could be growing on bad customers). Doesn't consider capital efficiency (burn multiple). Doesn't separate organic vs paid. Use alongside NDR, gross margin, and burn multiple — never in isolation.
Last updated May 2026. Sources: Bessemer State of Cloud, Public Comps Tracker.