How much new annual recurring revenue you get back for every dollar of sales and marketing you spent the quarter before, where above 0.75 is a green light to hire more reps.
Scale Venture Partners' Rory O'Driscoll defined the magic number in a widely circulated 2008 essay as net new ARR in the quarter, annualized, divided by the previous quarter's sales and marketing expense. The framework was meant as a one-line answer to the board question 'should we hire more reps?', and it has been recited verbatim in SaaS pitches ever since.