The first metric we look at is historical cash efficiency. We measure cash efficiency as revenue / [equity + debt — cash] or simply put, revenue / historical net investment. The data below for the last 73 SaaS IPO’s shows at the time of IPO, SaaS companies generated on median $0.59 of revenue for every dollar of net investment up to the IPO. The average is higher at $0.91 of revenue for every dollar of investment. ARR is a close proxy to revenue, so comparing revenue to net investment works well as a proxy for historical cash efficiency. Furthermore, these are fine metrics so long as you have net dollar retention greater than 100%+ meaning you never lose that $0.60 of revenue and actually grow it over time.