2021 financial and operations benchmark report by Openview

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Techceler...
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FINANCIAL & 
OPERATING 
BENCHMARKS
View the interactive report here.
Sean Fanning & Kyle Poyar
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T A B L E  O F  C O N T E N T S
Introduction
I
Participant Overview
II
Executive Summary
III
Financial & 
Operating Insights
IV
Product-Led 
Growth Insights
V
Go-to-Market Insights
VI
Cash Flow Insights
VII
Talent Insights
VIII
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I. Introduction
Objective data is critical to making the right strategic 
decisions that can propel your long-term growth. For 
this reason, we’re releasing the results of our fifth 
annual Financial & Operating Benchmarks survey 
(formerly known as the SaaS Benchmarks Survey). This 
report was designed specifically to enable operators 
to compare themselves against their exact peers 
across the metrics that matter most in a SaaS business. 
This year’s survey was live from May to September. 
The 2021 report incorporates data from more than 
2,400 respondents aggregated across prior surveys 
as well as almost 600 this year alone. 
Our data revealed surprising insights about the cash 
flow dynamics in SaaS companies, what investors are 
rewarding in company performance, the prevalence 
of product-led growth, how to position for success in 
a fundraise as well as fundraising trends.
We’ve also covered many of our usual favorite topics 
ranging from the key SaaS value drivers, pricing 
models, progress on executive diversity and much 
more. This document details the “nitty gritty” results of 
our benchmarks survey to provide insight into ranges 
of performance across various metrics.
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THANKS  TO  OUR  
SPONSORS & PARTNERS
PARTICIPANT
OVERVIEW
II.
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<$1M
$2.5M-10M
$1-2.5M
$10-20M
$20-50M
>$50M
23%
25%
18%
13%
14%
7%
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
US
Europe
Canada
APAC
Other
54%
12%
7%
19%
8%
B y  A R R
B y  
G e o g r a p h y
D i s t r i b u t i o n
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Source: 2021 OpenView Financial & Operating Metrics 
Survey, N=225.
D i s t r i b u t i o n
B y  
r e s p o nde n t  
r o l e
B y  
t a r g e t  
c u s t o m e r  
s i z e
Enterprise
(>1,000 employees)
Midmarket
(101-1,000 employees)
SMB
(20-100 employees)
Very small business
(VSB, <20 employees)
Consumer
36%
7%
2%
34%
21%
CEO / Founder / Co-Founder
CFO / VP of Finance
COO / VP of Operations
Other
CRO / VP of Sales
CMO / VP of Marketing
50%
7%
4%
30%
6%
3%
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EXECUTIVE
SUMMARY
III.
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HOW TO USE  THESE  
BENCHMARKS
We often get asked: 
“How do I use these benchmarks, isn’t faster and 
cheaper always better?” Our answer: it depends. 
The focus should be on the qualitative: stage of business, state of 
the market, customer base, and what is right for the business' 
stakeholders (employees, customers, etc.) and its shareholders.
Operationalizing benchmarks is part science, part art – not just 
where is everyone else, but also: “what makes sense for me?”
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Here are 4 tips we offer for using benchmarks:
Benchmarks are the map, 
not the territory:
Use financial & operating benchmarks 
only as a map for “acceptable ranges,” 
at any point in time that will eventually 
enable your business to generate 
repeatable and predictable free cash 
flow in the future.
Performance and valuation are 
a multivariate equation: 
Growth is a function of investment in 
sales and product which is a function of 
growth… and so on…
Sound strategy involves tradeoffs: 
See above. Sometimes sacrificing 
efficiency for growth is necessary to win 
the short term or unlock the next round 
of financing.
Let shareholders’ risk / return 
expectation act as a guide: 
Different investors have different tastes 
for risk and return; know what your 
“dream investor” looks like so you can 
optimize performance vs. benchmarks 
that align with their “taste.”
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Company performance benchmarks
S I Z E  A N D  G R O W T H
Employees
Number of full-time equivalent employees at the end of Q1 2021.
Funding
Amount of equity capital raised to date.
Annual  Recur r ing Revenue (ARR)
Company annual recurring revenue (ARR) scale at the end of Q1 2021.
YoY Growth Rate
Change in annual recurring revenue at the end of Q1 2021 vs. Q1 2020.
F I N A N C I A L
Sales  & Market ing Spend
Spending on Sales & Marketing, including headcount, as a % of ending ARR as of Q1 2021.
R&D Spend
Spending on R&D, including headcount, as a % of ending ARR as of Q1 2021.
Gross  Marg ins
Subscription revenue less cost of goods sold divided by subscription revenue at the end of Q1 2021.
Month ly  Burn  Rate ( in  000’s )
Net monthly operating cash burn rate at the end of Q1 2021 (total $ lost each month, negative values = profit).
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
Months of subscription gross margin to recover the fully loaded cost of acquiring a customer.
Gross  Dol lar  Reten t ion
Annual gross dollar retention (after churn, exclusive of upsells & expansion) seen in cohorts.
Net  Dol lar  Reten t ion
Annual net dollar retention (after churn, inclusive of upsells & expansion) seen in cohorts.
D I V E R S I T Y
Women in  Leadersh ip
% of female representation among employees Director-level and above.
Underrepresented Minor i t ies  in  Leadersh ip
% of underrepresented minority representation among employees Director-level and above.
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<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
18 (5-18)
38 (18-38)
76 (38-76)
151 (76-151)
151 (151-351)
351 (351-463)
YoY Growth Rate
100% (26-300%) 90% (45-300%) 50% (30-100%)
50% (20-75%)
33% (25-49%)
30% (10-56%)
F I N A N C I A L
Sales  & Market ing Spend
25% (6-50%)
30% (13-40%)
32% (20-49%)
34% (15-44%)
35% (25-44%)
50% (19-61%)
R&D Spend
50% (30-80%)
40% (30-65%)
34% (25-55%)
39% (20-50%)
25% (20-45%)
30% (22-39%)
Gross  Marg ins
67% (24-83%)
75% (58-84%)
76% (68-83%)
75% (62-85%)
80% (75-83%)
79% (70-87%)
Month ly  Burn  Rate ($ in  000s )
$50 (50-175)
$50 (0-375)
$375 (50-500)
$375 (144-875)
$375 (0-1250)
$25 (0-1625)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (2-11)
8 (5-15)
15 (8-15)
15 (11-15)
18 (12-21)
15 (10-17)
Gross  Dol lar  Reten t ion
98% (90-100%) 96% (90-100%)
95% (82-98%)
84% (73-92%)
90% (85-95%)
85% (64-90%)
Net  Dol lar  Reten t ion
100% (93-110%) 100% (94-110%) 106% (96-120%) 103% (86-113%) 105% (100-110%) 105% (95-120%)
D I V E R S I T Y
Women in  Leadersh ip
15% (0-30%)
25% (5-40%)
25% (13-45%)
30% (23-40%)
30% (19-41%)
28% (11-44%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0-25%)
0% (0-44%)
0% (0-20%)
2% (0-20%)
5% (0-14%)
9% (5-26%)
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
Rows represent common KPIs across 
categories including size and growth, 
financial, value drivers, and diversity 
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<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
18 (5-18)
38 (18-38)
76 (38-76)
151 (76-151)
151 (151-351)
351 (351-463)
YoY Growth Rate
100% (26-300%) 90% (45-300%) 50% (30-100%)
50% (20-75%)
33% (25-49%)
30% (10-56%)
F I N A N C I A L
Sales  & Market ing Spend
25% (6-50%)
30% (13-40%)
32% (20-49%)
34% (15-44%)
35% (25-44%)
50% (19-61%)
R&D Spend
50% (30-80%)
40% (30-65%)
34% (25-55%)
39% (20-50%)
25% (20-45%)
30% (22-39%)
Gross  Marg ins
67% (24-83%)
75% (58-84%)
76% (68-83%)
75% (62-85%)
80% (75-83%)
79% (70-87%)
Month ly  Burn  Rate ($ in  000s )
$50 (50-175)
$50 (0-375)
$375 (50-500)
$375 (144-875)
$375 (0-1250)
$25 (0-1625)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (2-11)
8 (5-15)
15 (8-15)
15 (11-15)
18 (12-21)
15 (10-17)
Gross  Dol lar  Reten t ion
98% (90-100%) 96% (90-100%)
95% (82-98%)
84% (73-92%)
90% (85-95%)
85% (64-90%)
Net  Dol lar  Reten t ion
100% (93-110%) 100% (94-110%) 106% (96-120%) 103% (86-113%) 105% (100-110%) 105% (95-120%)
D I V E R S I T Y
Women in  Leadersh ip
15% (0-30%)
25% (5-40%)
25% (13-45%)
30% (23-40%)
30% (19-41%)
28% (11-44%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0-25%)
0% (0-44%)
0% (0-20%)
2% (0-20%)
5% (0-14%)
9% (5-26%)
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
Columns represent distribution of 
responses from companies at varying 
levels of ARR, from <$1M to >$50M
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<$1M
$1-2.5M $2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
18 (5-18)
38 (18-38)
76 (38-76)
151 (76-151)
151 (151-351)
351 (351-463)
YoY Growth  Rate
100% (26-300%) 90% (45-300%)
50% (30-100%)
50% (20-75%)
33% (25-49%)
30% (10-56%)
F I N A N C I A L
Sales  &  Marke t ing Spend
25% (6-50%)
30% (13-40%)
32% (20-49%)
34% (15-44%)
35% (25-44%)
50% (19-61%)
R&D Spend
50% (30-80%)
40% (30-65%)
34% (25-55%)
39% (20-50%)
25% (20-45%)
30% (22-39%)
Gross  Marg ins
67% (24-83%)
75% (58-84%)
76% (68-83%)
75% (62-85%)
80% (75-83%)
79% (70-87%)
Month ly  Burn Rate  ($  in  000s )
$50 (50-175)
$50 (0-375)
$375 (50-500)
$375 (144-875)
$375 (0-1250)
$25 (0-1625)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (2-11)
8 (5-15)
15 (8-15)
15 (11-15)
18 (12-21)
15 (10-17)
Gross  Do l lar  Re ten t ion
98% (90-100%)
96% (90-100%)
95% (82-98%)
84% (73-92%)
90% (85-95%)
85% (64-90%)
Net  Do l lar  Re ten t ion
100% (93-110%)
100% (94-110%)
106% (96-120%)
103% (86-113%) 105% (100-110%) 105% (95-120%)
D I V E R S I T Y
Women in  Leadersh ip
15% (0-30%)
25% (5-40%)
25% (13-45%)
30% (23-40%)
30% (19-41%)
28% (11-44%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0-25%)
0% (0-44%)
0% (0-20%)
2% (0-20%)
5% (0-14%)
9% (5-26%)
Each cell represents the median 
performance of a company, as well as 
the range (bottom quartile – top quartile) of 
each metric at each respective ARR scale
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
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Financial & operating metrics by ARR
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
18 (5-18)
38 (18-38)
76 (38-76)
151 (76-151)
151 (151-351)
351 (351-463)
YoY Growth Rate
100% (26-300%) 90% (45-300%) 50% (30-100%)
50% (20-75%)
35% (25-49%)
30% (10-56%)
F I N A N C I A L
Sales  & Market ing Spend
25% (6-50%)
30% (13-40%)
32% (20-49%)
34% (15-44%)
35% (25-44%)
50% (19-61%)
R&D Spend
50% (30-80%)
40% (30-65%)
34% (25-55%)
39% (20-50%)
25% (20-45%)
30% (22-39%)
Gross  Marg ins
67% (24-83%)
75% (58-84%)
76% (68-83%)
75% (62-85%)
80% (75-83%)
79% (70-87%)
Month ly  Burn  Rate ($ in  000s )
$50 (50-175)
$50 (0-375)
$375 (50-500)
$375 (144-875)
$375 (0-1250)
$25 (0-1625)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (2-11)
8 (5-15)
15 (8-15)
15 (11-15)
18 (12-21)
15 (10-17)
Gross  Dol lar  Reten t ion
98% (90-100%) 96% (90-100%)
95% (82-98%)
84% (73-92%)
90% (85-95%)
85% (64-90%)
Net  Dol lar  Reten t ion
100% (93-110%) 100% (94-110%) 106% (96-120%) 103% (86-113%) 105% (100-110%) 105% (95-120%)
D I V E R S I T Y
Women in  Leadersh ip
15% (0-30%)
25% (5-40%)
25% (13-45%)
30% (23-40%)
30% (19-41%)
28% (11-44%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0-25%)
0% (0-44%)
0% (0-20%)
2% (0-20%)
5% (0-14%)
9% (5-26%)
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Financial & operating metrics by ARR ( 2 0 2 1  v s .  2 0 2 0 )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
18 (↑ 8)
38 (↑ 13)
76 (↑ 24)
151 (↑ 58)
151 (↓ 69)
351 (↓ 144)
YoY Growth Rate
100% (0%)
90% (↑ 30%)
50% (↑ 9%)
50% (↑ 4%)
35% (↓ 15%)
30% (↑ 9%)
F I N A N C I A L
Sales  & Market ing Spend
25% (↑ 5%)
30% (0%)
32% (↑ 2%)
34% (↓ 1%)
35% (↑ 4%)
50% (↑ 21%)
R&D Spend
50% (↓ 18%)
40% (0%)
34% (↑ 2%)
39% (↑ 11%)
25% (↓ 2%)
30% (↑ 8%)
Gross  Marg ins
67% (0%)
75% (0%)
76% (↓ 2%)
75% (↓ 4%)
80% (↑ 1%)
79% (↑ 4%)
Month ly  Burn  Rate ($ in  000s )
$50 ($0)
$50 ($0)
$375 (↑ $200)
$375 (↑ $200)
$375 ($0)
$25 (↑ $25)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (0)
8 (↓ 2)
15 (↑ 4)
15 (↑ 4)
18 (↑ 3)
15 (0)
Gross  Dol lar  Reten t ion
98% (↑ 8%)
96% (↑ 6%)
95% (↑ 5%)
84% (↓ 3%)
90% (↑ 3%)
85% (↓ 5%)
Net  Dol lar  Reten t ion
100% (↑ 1%)
100% (0%)
106% (↑ 3%)
103% (↑ 1%)
105% (0%)
105% (0%)
D I V E R S I T Y
Women in  Leadersh ip
15% (↑ 5%)
25% (↑ 5%)
25% (0%)
30% (↑ 1%)
30% (↑ 10%)
28% (↑ 13%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0%)
0% (0%)
0% (0%)
2% (↑ 2%)
5% (0%)
9% (↓ 4%)
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Financial & operating metrics by most recent funding
Angel / Seed
Series A
Series B
Series C
Series D+
S I Z E  A N D  G R O W T H
Employees
18 (8-38)
76 (38-151)
151 (76-151)
151 (76-251)
351 (351-351)
Funding
$3M ($0.5-3M)
$15M ($8-15M)
$43M ($28-63M)
$63M ($43-63M)
$88M ($43-100M)
Annual  Recur r ing Revenue (ARR)
$2M ($0.5-$2M)
$6M ($2-6M)
$15M ($6-15M)
$15M ($6-35M)
$50M ($35-50M)
YoY Growth Rate
100% (41-304%)
60% (35-193%)
65% (29-121%)
35% (23-47%)
43% (13-50%)
F I N A N C I A L
Sales  & Market ing Spend
28% (10-40%)
33% (20-50%)
33% (20-44%)
39% (25-66%)
42% (25-60%)
R&D Spend
40% (25-70%)
40% (26-56%)
30% (18-50%)
38% (26-55%)
35% (20-46%)
Gross  Marg ins
70% (49-82%)
78% (68-85%)
78% (70-85%)
80% (73-83%)
78% (68-88%)
Month ly  Burn  Rate ($ in  000s )
$50 (50-175)
$375 (50-625)
$375 (175-1250)
$375 (175-1,094)
$275 (0-1250)
S A A S  V A L U E  D R I V E R S
CAC Payback (months )
8 (3-15)
15 (8-21)
15 (11-17)
15 (12-28)
15 (15-21)
Gross  Dol lar  Reten t ion
97% (91-100%)
93% (81-98%)
90% (80-97%)
88% (82-92%)
85% (77-92%)
Net  Dol lar  Reten t ion
100% (97-120%)
102% (88-110%)
106% (99-125%)
104% (100-108%)
95% (91-118%)
D I V E R S I T Y
Women in  Leadersh ip
20% (0-40%)
25% (9-37%)
30% (20-50%)
28% (20-40%)
19% (10-40%)
Underrepresented Minor i t ies  in  Leadersh ip
0% (0-50%)
0% (0-20%)
3% (0-20%)
5% (0-14%)
9% (0-20%)
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
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FINANCIAL & OPERATING
INSIGHTS
IV.
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<50%
50 to 70%
70 to 75%
75 to 80%
80 to 85%
85 to 90%
>90%
GROSS  MARG IN  ON 
SUBSCRIPTION REVENUE
Gross margin is a key and often 
overlooked lever in any business – 7/10 
companies surveyed have gross margins 
in excess of 70%. Best-in-class companies 
across all ARR scales see gross margins of 
at least 80%.
As a reminder, gross margin should 
always include hosting, as well as any 
services and customer onboarding costs.
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
Gross margin on 
subscription 
revenue 
distribution
16%
15%
13%
13%
19%
14%
11%
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<60%
60 to 70%
70 to 80%
80 to 90%
>90%
GROSS  DOLL AR  
RETENTION RATES
Gross dollar 
retention rates 
(annual)
Top tier gross retention rates are 
consistently ~85-90%+ regardless of last 
round or ARR scale. 
Similarly, these rates are consistent 
regardless of bull or bear market 
conditions. This year we saw a reduction 
in the percentage of respondents in the 
lower GDR tiers (besides 60-70%, which 
remained flat) and a 10% increase in 
companies reporting GDR >90%.
Outstanding gross dollar retention 
remains “table stakes” in enterprise SaaS.
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
8%
5%
4%
20%
63%
21
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<85%
85 to 95%
95 to 100%
100 to 105%
105 to 115%
115 to 125%
125 to 135%
>135%
Net dollar retention remains a “fan 
favorite” vanity metric for companies and 
investors alike. As we saw with GDR, net 
dollar retention rates have improved 
since 2020. Nearly half of companies 
surveyed reported NDR over 105% and 3 
in 20 reported NDR over 125%.
Net dollar retention tells the whole story 
about what is happening within your 
customer base. While there are many 
ways to calculate this, we believe all 
retention figures should be tracked at the 
cohort level to most appropriately 
visualize trends over time. 
Net dollar 
retention 
rates 
(annual)
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
13%
10%
13%
18%
21%
11%
7%
7%
NET  DOLL AR  
RETENTION RATES
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Gross & net retention by ARR
Gross retention rates start off high, as 
companies initially refine product-market 
fit, working directly with customers in one 
target segment of the market to 
understand what needs are.
As companies reach the $10-20M 
threshold they’ve achieved product-
market fit and address customer needs in 
the total market. It becomes more 
competitive; however, companies 
become much more effective at farming 
their existing customer base for 
expansion.
As evidenced in how companies allocate 
their spending, focus begins to shift away 
from product and towards perfecting the 
GTM motion, benefiting net retention 
(through upsell) at the expense of 
satisfying every customer use case (gross 
retention).
A R R  S C A L E
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
98% 
96% 
95% 
84% 
90% 
85% 
100% 
100% 
106% 
103% 
105% 
105% 
 80%
 85%
 90%
 95%
 100%
 105%
 110%
<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
GDR NDR
R E T E N T I O N  R A T E S  ( A N N U A L )
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Net retention by target customer type
Regardless of segment, a competitive 
NDR rate lies between 100% and 110%. 
Where we used to see meaningfully 
higher variance among VSB and SMB 
segments, 2021 respondents indicate 
VSB is now the least variable segment, 
with the rest relatively equal (looking at 
interquartile ranges from 2020 to 2021). 
While we’re encouraged by the reduced 
spread amongst smaller SMB’s, VSB 
median NDR remains the same since 
2020 – churn remains a complex 
challenge for vendors selling to smaller 
businesses.
T A R G E T  C U S T O M E R  T Y P E
N E T  D O L L A R  R E T E N T I O N  R A T E S  ( A N N U A L )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
 80%
 85%
 90%
 95%
 100%
 105%
 110%
 115%
 120%
VSB
SMB
Midmarket
Enterprise
Bottom Quartile
Median
Top Quartile
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Equity capital raised by ARR*
Frothy markets paired with venture 
investors who are motivated to deploy 
record amounts of capital have provided 
companies with more access to cash than 
ever before.
Mid-size companies ($10–20M ARR) are 
increasingly raising large amounts of 
equity capital (29% have raised >$50M, 
up from 10% last year).
Early-stage companies (<$1M ARR) are 
also raising more, with 14% bringing in 
between $10–50M of equity capital (up 
from 0% last year).
E Q U I T Y  C A P I T A L  R A I S E D
A R R  S C A L E
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
Note*: Excludes companies that haven’t raised capital
70% 
62% 
26% 
4% 
8% 
14% 
12% 
21% 
4% 
5% 
19% 
31% 
14% 
8% 
8%
4%
15%
54%
54%
40%
3% 
4% 
8% 
29% 
25% 
60% 
0%
20%
40%
60%
80%
100%
<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
>$50M
< $5M
$5-10M
$10-20M
$20-50M
>$50M
25
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 $50
 $100
 $150
 $200
 $250
 $300
 $350
 $400
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
21 Median
2020 Median
Monthly cash burn
Expansion stage businesses who were still 
refining product-market fit and their go-to-
market activities heading into the 
pandemic seem to have overcorrected 
for burn given the uncertainty around 
customer demand. This year we saw a 
reversion to higher burn rates, no doubt 
facilitated by large amounts of capital 
available amid resurgent demand.
Outside of the expansion stage ($2.5–
20M ARR), burn remained consistent with 
last year’s report.
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. $0 burn implies breakeven 
or profitable.
A R R  S C A L E
M O N T H L Y  C A S H  B U R N  ( $ 0 0 0 ’ S )
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 $2
 $4
 $6
 $8
 $10
 $12
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Monthly burn per FTE by ARR
Software companies’ largest expense is 
typically headcount. After normalizing 
burn for the turbulence relating to 
headcount last year, a clearer picture 
emerges.
Early-stage companies (<$1M ARR) are 
raising more and burning much more per 
head than they were in 2020 (YoY 
increase of $3,500 per FTE). This may be 
a function of the increase in absolute 
amounts of capital raised, which allows 
for more product experimentation before 
monetization (offsetting burn).
While the expansion stage ($2.5-20M) 
burned more this year than last on an 
absolute basis, it appears this may have 
been a function of adding more heads 
given median per head values.
A R R  S C A L E
M O N T H L Y  C A S H  B U R N  P E R  F T E  ( $ 0 0 0 ’ S )
2020 Median
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. $0 burn implies breakeven 
or profitable.
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PRODUCT-LED GROWTH
INSIGHTS
V.
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WHAT  I S
PRODUCT-LED GROWTH?
Product-led growth (PLG) is an end user-focused 
growth model that relies on the product itself as 
the primary driver of customer acquisition, 
conversion and expansion.
PLG is employed by many of the fastest 
growing software companies including 
standout public companies.
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Not all enterprise SaaS is created equal; the case for PLG
Product-led companies are always “open 
for business”, and their lower ACV entry 
prices are less susceptible to budget cuts. 
In fact, our Product-Led Growth index has 
outperformed the SaaS index we track by 
nearly 2x since January 2020 – while all 
have performed strongly, PLG revenue is 
clearly worth more to investors.
%  C H A N G E  I N  I N D E X
Source: Pitchbook as of 9/30/2021. SaaS index multiples calculated as enterprise value / revenue and represent median 
value as of each date for the ~70 public SaaS companies OpenView tracks.
-50.0%
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
300.0%
Jan
20
Feb
20
Mar
20
Apr
20
May
20
Jun
20
Jul
20
Aug
20
Sep
20
Oct
20
Nov
20
Dec
20
Jan
21
Feb
21
Mar
21
Apr
21
May
21
Jun
21
Jul
21
Aug
21
Sep
21
PLG Index
SaaS Index
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Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. PLG Companies defined as 
those leveraging more than three of the PLG strategies surveyed. 
Adoption of product-led growth strategies
Despite our best efforts at evangelizing 
PLG, most companies are still 
experimenting, but still very few 
companies have gone all-in – just 23% of 
respondents report PLG being 
fundamental to their business which is 
slightly down from last year.
Although free trials remain the most 
popular product-led growth strategy, 
respondents have begun to de-prioritize 
free trials (90% in 2020) in favor of 
higher-impact alternatives like adding 
dedicated growth resources (up more 
than 10% vs 2020).
PLG 
Companies
All
Companies
Free trial offering
74% 
47% 
Bottoms-up sales
64% 
41% 
Dedicated growth resources (FTEs)
64% 
21% 
In-product onboarding
63% 
28% 
Self-service buying experience
62% 
29% 
Product analytics for decision making
51% 
28% 
Referral Programs
50% 
35% 
Product Qualified Leads
47% 
24% 
Freemium offering
47% 
18% 
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48% 
46% 
35% 
25% 
52% 
54% 
65% 
75% 
VSMB
SMB
Midmarket
Enterprise
PLG Non-PLG
Product-led growth by target customer segment
Companies targeting VSB/SMB customers 
are adopting product-led growth 
strategies at an increasing rate (up 5% 
and 8%+ since last year, respectfully).
Every target segment saw a YoY uptick in 
PLG adoption besides large enterprises.
T A R G E T  S E G M E N T
%  O F  R E S P O N D E N T S
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. PLG Companies defined
as those leveraging more than three of the PLG strategies surveyed. 
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40% 
45% 
45% 
23% 
27% 
20% 
9% 
9% 
23% 
18% 
40% 
45% 
45% 
54% 
55% 
<$1M
$1-2.5M
$2.5M-10M
$10-20M
$20-50M
<$5k
$5-10k
>$10k
Product-led growth ACVs by ARR scale
%  O F  R E S P O N D E N T S
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. PLG Companies defined as those leveraging more than three of the PLG 
strategies surveyed.
PLG companies land with a lower CAC at 
more digestible ACVs to start, but can 
drive significant expansion in accounts 
over time as the product spreads 
throughout large organizations.
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 20%
 40%
 60%
 80%
 100%
 120%
 140%
 160%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
PLG
Non-PLG
Product-led businesses grow faster
We used to observe PLG companies 
growing more slowly than their peers at 
earlier stages; they’re now outpacing 
their non-PLG peers at all ARR scales.
This may be because they are able to 
raise the capital required to fuel early 
product development and usage growth 
without monetizing, then sustain that 
momentum as they gain product-market 
fit and deliver more value to customers as 
the company matures.
A R R  S C A L E
M E D I A N  G R O W T H  R A T E
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225. PLG Companies defined
as those leveraging more than three of the PLG strategies surveyed. 
GO-TO-MARKET
INSIGHTS
VI.
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 50%
 100%
 150%
 200%
 250%
 300%
 350%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Median
Top Quartile
Growth rate by company ARR
Growth rate is more closely correlated 
with SaaS valuations than ever before.
Software companies grow rapidly in their 
early stages – a typical company doubles 
YoY and a top quartile company more 
than quadruples. 
Besides the $20—50M ARR bucket, 
median growth rates have risen vs. 2020. 
While we can reasonably expect 2020 
growth was stunted by the impacts of the 
pandemic and any slowdown in 
operating investments, we’re encouraged 
to see companies stepping back on the 
gas.
Top quartile growth rates for early-stage 
companies are increasing two and three-
fold from 2020 (<$1M ARR and $1—2.5M 
ARR, respectively). Companies are being 
founded and funded… and customers are 
back to buying!
A R R  S C A L E
G R O W T H  R A T E  ( A N N U A L )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
2020 Median
Top quartile growth for early-stage 
companies has skyrocketed since 2020
+120%
+200%
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 10%
 20%
 30%
 40%
 50%
 60%
 70%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Sales & marketing spend by ARR
Sales & marketing expenses typically 
become a SaaS company’s largest 
areas of spend with increased scale, 
overtaking product and engineering, 
which dominates spend at the earlier 
stages.
After the product has been built and 
product-market fit has been found, it’s 
time to monetize! We continue to see 
companies invest more heavily as a 
percent of ARR when they enter the 
expansion stage at $1M of ARR. This 
reduces as companies scale and press 
for operational excellence in sales.
A R R  S C A L E
S A L E S  &  M A R K E T I N G  S P E N D  ( %  O F  A R R )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
2020 Median
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 20%
 40%
 60%
 80%
 100%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Product & engineering spend by ARR
Product & engineering expenses are 
usually the first place SaaS companies 
prioritize spend as they work towards 
product-market fit.
Median spend was relatively flat across 
ARR stages besides the earliest (<$1M 
ARR), which saw a massive dip versus 
2020 (median down 18%). This could be 
due to hiring issues, where the smallest 
companies simply can’t find/attract the 
right engineering talent, or ova 
companies benefitting from increased 
early-stage funding are choosing to invest 
in other functional areas sooner (e.g. 
Sales).
A R R  S C A L E
P R O D U C T  &  E N G I N E E R I N G  S P E N D  ( %  O F  A R R )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
2020 Median
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 5%
 10%
 15%
 20%
 25%
 30%
 35%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
General & administrative spend by ARR
General & administrative expenses are 
reliably the smallest area of spend 
among SaaS businesses.
In fact, over the last four years of this 
report, G&A has yet to crack >25% of 
total operating expense spend at any 
ARR scale, with the lion’s share being 
allocated between developing (product & 
engineering) and monetizing (sales & 
marketing) the product. 
A R R  S C A L E
G E N E R A L  &  A D M I N I S T R A T I V E  S P E N D  ( %  O F  A R R )
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
2020 Median
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Sales & marketing vs product & engineering spend by ARR
The waxing and waning relationship 
between sales and product spend has 
been a consistent observation in each of 
the last four years of this report, with each 
bucket of spend reaching it’s maximum 
(% of ARR) at the smallest (product) and 
largest (sales) ARR scale.
However, the ARR threshold where this 
shift in spend occurs continues to creep 
upwards ($2.5M in 2019, to $10M in 
2020, to $20M in 2021), suggesting 
business focus remains on the product for 
longer as companies and their 
shareholders are more focused on 
customer value creation for longer.
A R R  S C A L E
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
M E D I A N  S P E N D  ( %  O F  A R R )
25% 
30% 
32% 
34% 
35% 
50% 
50% 
40% 
34% 
39% 
25% 
30% 
 --
 10%
 20%
 30%
 40%
 50%
 60%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Sales & Marketing
Product & Engineering
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 5
 10
 15
 20
 25
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Months to recover CAC (CAC payback)
A R R  S C A L E
C A C  P A Y B A C K  I N  M O N T H S ( 1 )
CAC payback generally lengthens when 
companies achieve greater ARR scale –
but watch out for worsening your go-to-
market efficiency as you grow. This year’s 
slip in payback data versus 2020 may 
simply be a follow-on effect of rehiring 
after the pandemic adding transient bloat 
to CAC, or a function of companies 
staffing up not yet ramped sales 
resources in response to increased 
customer demand.
In our opinion, companies are still under-
reporting their true CAC Payback period. 
Be sure your payback is fully loaded 
(including overhead like rent) and that it is 
gross margin affected.
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
(1) Excluded companies <$1M ARR because they don’t have enough data for predictable CAC payback..
2020 Median
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CASH FLOW
INSIGHTS
VII.
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EVERYTH ING I S  VALUED  
ON CASH FLOW…
…Eventually! The present value of future cash flows 
(calculated in a Discounted Cash Flow Analysis) is 
what any business is intrinsically worth. Of course, 
when you’re running a private company in a large 
market that has raised venture capital the aim is for 
you to grow fast and burn money creating value 
for customers so that one day you can capture 
value and generate cash (even if it is years away).
But even before your business does $1B in revenue 
with 25% free cash flow margins, managing cash 
efficiently is critical.
Would you rather charge your customers annually 
up front and reinvest that cash immediately, or wait 
to have them pay you monthly in arrears? Yes, there 
are considerations and tradeoffs specific to your 
customers and their needs but conceptually 
collecting cash to reinvest sooner is better. Take 
customer’s capital and your investors capital and 
reinvest even more to grow even faster!
In the pages that follow, we’ll detail specific insights 
generated by our survey sponsor Tesorio about 
balance sheet data based on a company’s 
revenue scale. 
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157 
90 
97 
 --
 20
 40
 60
 80
 100
 120
 140
 160
 180
Dec'19Jan'20Feb'20Mar'20Apr'20May'20Jun'20Jul'20Aug'20Sep'20Oct'20Nov'20Dec'20Jan'21Feb'21Mar'21Apr'21May'21Jun'21Jul'21Aug'21Sep'21<$50M
$50-100M
>$100M
Days Sales Outstanding
GAAP revenue or billings growth is great 
but fueling that momentum requires 
cash (and a lot of it as evidenced in this 
report). Days Sales Outstanding (”DSO”) 
is a popular way of understanding how 
efficiently invoices are being converted 
to cash.
Because DSO is calculated using Credit 
Sales as its denominator, it’s important 
to note how changes in sales can affect 
this statistic.
When using DSO as our measuring stick, 
companies at the earliest stages 
(<$50M revenue) appear to face 
tougher collection cycles – a trend 
highlighted by the pandemic.
M o n t h
#  o f  D a y s
Source: Tesorio. Includes only Software/SaaS customers. 
Note: May’20 highlighted as the approximate peak effect of COVID-19 on cash flow metrics.
Days Sales Outstanding (“DSO”) = Credit Sales / # Days in the Period
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Average Days Delinquent
Similar to DSO, Average Days 
Delinquent (”ADD”) underscores the 
same conclusion – smaller companies 
are more susceptible to systemic risk.
While ADD for small and mid-size 
companies had largely reverted to pre-
COVID levels by 2021, larger 
companies (>$100M revenue) 
managed to improve their ADD since 
the pandemic, from 15 to 10. 
COVID highlighted the importance of 
quickly collecting cash from invoices, 
larger companies were simply the only 
ones with the firepower (talent, cash, 
etc.) to do something about it.
M o n t h
#  o f  D a y s
23 
16 
15 
 --
 5
 10
 15
 20
 25
Dec'19Jan'20Feb'20Mar'20Apr'20May'20Jun'20Jul'20Aug'20Sep'20Oct'20Nov'20Dec'20Jan'21Feb'21Mar'21Apr'21May'21Jun'21Jul'21Aug'21Sep'21<$50M
$50-100M
>$100M
Source: Tesorio. Includes only Software/SaaS customers. 
Note: May’20 highlighted as the approximate peak effect of COVID-19 on cash flow metrics.
Average Days Delinquent (“ADD”) = Average # of Days from the Due Date to Payment Date
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Average Days Collected
Average Days Collected (“ADC”) 
provides an important counterbalance 
to viewing cash collections through DSO 
or ADD.
Measured as the number of days it takes 
for invoices to be collected, businesses 
tend to collect cash at similar rates, 
regardless of scale. 
This offers an important perspective, 
suggesting that the increase in DSO for 
smaller companies (<$50M revenue) 
was likely due to a sharper decline in 
Credit Sales than larger, more 
established peers.
M o n t h
#  o f  D a y s
Source: Tesorio. Includes only Software/SaaS customers. 
 --
 10
 20
 30
 40
 50
 60
Dec'19Jan'20Feb'20Mar'20Apr'20May'20Jun'20Jul'20Aug'20Sep'20Oct'20Nov'20Dec'20Jan'21Feb'21Mar'21Apr'21May'21Jun'21Jul'21Aug'21Sep'21<$50M
$50-100M
>$100M
Average Days Collected (“ADC”) = Average # Days from the Invoice Date to Payment Date
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Average Terms
The Average Terms offered across 
software companies unsurprisingly 
increase with scale, as larger businesses 
have greater ability to extend credit to 
their customers. 
Taken with ADC, we can clearly see that 
the pandemic did not disrupt cash 
collections for smaller companies as 
much as DSO and ADD might imply.
While certainly more sensitive to 
systemic fluctuations, differences in cash 
collection seem to boil down to smaller 
companies not being able to offer the 
same favorable terms as their larger 
counterparts.
M o n t h
#  o f  D a y s
Source: Tesorio. Includes only Software/SaaS customers. 
 --
 5
 10
 15
 20
 25
 30
 35
 40
Dec'19Jan'20Feb'20Mar'20Apr'20May'20Jun'20Jul'20Aug'20Sep'20Oct'20Nov'20Dec'20Jan'21Feb'21Mar'21Apr'21May'21Jun'21Jul'21Aug'21Sep'21<$50M
$50-100M
>$100M
Average Terms = Average # Days from the Invoice Date to Due Date
TALENT
INSIGHTS
VIII.
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29% 
13% 
28% 
15% 
30% 
18% 
61% 
12% 
51% 
38% 
26% 
13% 
16% 
13% 
12% 
59% 
12% 
48% 
 --
 10%
 20%
 30%
 40%
 50%
 60%
 70%
Hiring the best
talent
Hiring fast
enough to
meet plan /
budget
Don’t have the 
right expertise 
/ skills on the 
team
Fundraising
Burning too
much cash
Competitive
pressure /
threat
GTM execution Changing
customer
needs
Product
execution
2020
2021
What’s keeping founders up at night?
Although it’s becoming harder to hire 
talented headcount [1] (and hire that 
talent quickly [2]), founder feedback 
seems to suggest that cuts to headcount 
during the pandemic were precise 
enough to effectively consolidate 
expertise within their organizations [3].
It appears that having access to more 
capital has led founders to be far less 
concerned with how that money is spent 
(burned) when compared to 2020 [4]. 
Perhaps investors are quick to grant a 
(temporary) “COVID-pass” on cash burn 
– in any case, a notable shift that we 
didn’t expect to see.
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
%  O F  R E S P O N D E N T S  ( C H O O S E  3 )
[1]
[2]
[3]
[4]
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 --
 50
 100
 150
 200
 250
 300
 350
 400
 450
 500
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Number of employees by ARR scale
In the early stages, companies have one 
employee for every $95k in ARR. As 
companies scale to $10-20M, that figure 
jumps to $130k. Best-in-class is $200k+. 
On average, 33% of employees are in 
Engineering, 27% in S&M, 12% in 
Customer Success and 11% in Product (all 
within 2% of 2020’s distribution).
Each early and expansion stage (<$20M 
ARR) median employee count is up at 
least 45% from 2020, suggesting 
companies are re-hiring and returning to 
normal course after a turbulent 2020.
A R R  S C A L E
N U M B E R  O F  E M P L O Y E E S
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
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Mix of employees by function, by ARR scale
At the early stages, most startup 
employees are in Product & Engineering 
roles. However, as companies expand, 
they need to rapidly grow Customer 
Success and specialized functions to 
sustain rapid revenue growth.
We notice that Product & Engineering 
tends to be the main tradeoff as 
companies scale – once the product is 
built, commercial activities take priority. 
While the output of these activities scales 
more, emphasizing product-led 
approaches can also contribute to go to 
market success.
F T E  M I X  B Y  F U N C T I O N
A R R  S C A L E
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
38% 
36% 
36% 
31% 
30% 
23% 
15% 
12% 
11% 
11% 
9% 
12% 
9% 
9% 
9% 
9% 
11% 
10% 
17% 
18% 
18% 
19% 
24% 
24% 
9% 
13% 
13% 
15% 
13% 
12% 
13% 
12% 
12% 
15% 
14% 
19% 
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Engineering
Product
Marketing
Sales
Customer Success
Other
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Progress on gender equality
Larger companies continue to fare 
slightly better when it comes to 
gender diversity within 
management teams.
42% of respondents had one or 
more female BoD member, 
consistent with last year. 
Meanwhile, 6% had gender parity 
on the BoD and 16% had parity 
among their leadership team. 
Although diversity has been a 
trend in this report for years, it has 
been stagnant despite research 
showing that younger members of 
the workforce prioritize 
organizations that are diverse and 
inclusive of all people.
2017
2018
2019
2020
2021
1+ FEMALE BOD 
MEMBER
29%
37%
38%
42%
42%
GENDER PARITY 
IN LEADERSHIP
12%
13%
14%
14%
16%
GENDER PARITY 
ON BOD
4%
8%
8%
6%
6%
Source: 2021 OpenView Financial & Operating Metrics Survey, N=225.
ABOUT THE
AUTHORS
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SEAN
Fanning
Sean Fanning is a Vice President on OpenView’s 
Investment Team responsible for identifying, 
evaluating and executing on investment 
opportunities. He previously supported OpenView’s 
Expansion Team on Corporate Development, 
Portfolio Analysis, and Growth. Sean writes a semi-
regular newsletter on all thing's software and 
capital markets, Capital Markets Roundup. 
sean@ov.vc
@seandougfan
/seandfanning
V I C E  P R E S I D E N T
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KYLE
Poyar
Kyle helps OpenView’s portfolio companies 
accelerate top-line growth through deep insights 
into their market landscape and customers. He 
leads segmentation, positioning, channel/partner 
strategy, new market entry and packaging/pricing 
initiatives, partnering closely with portfolio 
leadership teams. Kyle writes a regular newsletter, 
Growth Unhinged. 
kyle@ov.vc
@poyark
/kyle-poyar
O P E R A T I N G  P A R T N E R
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TOM
KENYON
Tom is a Portfolio & Investment Analysis Associate on 
OpenView’s Capital Markets team. He works closely 
with OpenView’s portfolio companies advising on 
and executing M&A and capital raise transactions, 
as well as supporting exit planning activities.
tomk@ov.vc
/thomas-kenyon
A S S O C I A T E ,  P O R T F O L I O  
I N V E S T M E N T  &  A N A L Y S I S
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SAM
JOHNSON
Sam is a Corporate Development Associate on 
OpenView’s Capital Markets team. He works with 
OpenView’s portfolio companies on all inorganic 
and balance sheet related initiatives, from debt and 
equity fundraising, IPO preparation, and buy and 
sell side M&A.
samj@ov.vc
/samcarl johnson
A S S O C I A T E ,  C O R P O R A T E  
D E V E L O P M E N T
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Our mission is to improve people’s working lives.
We do this by: 
•
Investing in the best software companies
• Helping our portfolio companies accelerate 
growth and become market leaders
Learn more at ov.vc
THE  EXPANS ION S TAGE  
SOFTWARE VC
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THANK 
YOU