Beginner finance
Gross Margin
Revenue minus Cost of Goods Sold, divided by revenue. The foundational profitability metric that drives SaaS valuation multiples and unit economics.
#profitability
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Glossary
Intermediate metrics
Rule of 40
Growth rate % plus EBITDA margin % must equal or exceed 40. The single metric VCs use to balance SaaS growth against profitability efficiency.
Intermediate finance
Unit Economics
The direct revenues and costs associated with a single unit of a business, used to determine per-unit profitability and scalability.