The Rule of 40 is important because it measures both growth and profitability in one simple metric. SaaS companies often prioritize rapid growth, but profitability matters too. Achieving or surpassing 40% shows the company is creating shareholder value, balancing expansion with financial discipline. It helps investors compare SaaS firms of different sizes and growth stages, guiding better investment decisions.
For more visit: https://zingmatrix.com/rule-of-40/