A single-number health check that adds your growth rate to your profit margin, where anything above 40% lets a fast-growing money-loser and a slow-growing cash machine pass the same bar.
Brad Feld posted 'The Rule of 40% For a Healthy SaaS Company' in February 2015, attributing the rule to a board member at one of Foundry's portfolio companies. The essay turned a private heuristic into the single most cited SaaS benchmark of the next decade, used by everyone from Bessemer to Public Comps for ranking software companies.