Industry Benchmarks by Business Model
Use these as reference points when evaluating a founder's financial projections. Flag projections that fall significantly outside these ranges — both overly optimistic and unnecessarily pessimistic.
SaaS (B2B)
| Metric | Healthy Range | Red Flag |
|---|---|---|
| Monthly churn | 2-5% (SMB), <1% (Enterprise) | >7% monthly |
| LTV/CAC ratio | 3:1 or higher | <1.5:1 |
| CAC payback | 12-18 months | >24 months |
| Gross margin | 70-85% | <60% |
| Net revenue retention | 100-130% | <90% |
| ACV (SMB) | $1K-$25K/year | <$500/year without massive volume |
| ACV (Enterprise) | $25K-$250K+/year | — |
| Time to first revenue | 3-9 months | >18 months pre-revenue |
| Rule of 40 | Growth% + Margin% > 40 | <20 at scale |
SaaS (B2C / Prosumer)
| Metric | Healthy Range | Red Flag |
|---|---|---|
| Monthly churn | 3-7% | >10% |
| ARPU | $10-$50/month | <$5 without viral growth |
| Conversion (free→paid) | 2-5% | <1% |
| Payback period | 3-6 months | >12 months |
Marketplace / Platform
| Metric | Healthy Range | Red Flag |
|---|---|---|
| Take rate | 10-25% | <5% (hard to sustain), >30% (supply will leave) |
| Supply-side churn | <5% monthly | >10% |
| Liquidity (match rate) | >30% | <10% |
| GMV growth (early) | 15-25% MoM | <5% MoM after launch |
| Time to liquidity | 2-6 months in first market | >12 months |
E-Commerce / DTC
| Metric | Healthy Range | Red Flag |
|---|---|---|
| Gross margin | 50-70% | <40% |
| CAC (paid) | $20-$80 | >$150 for <$50 AOV |
| Repeat purchase rate | 25-40% within 90 days | <15% |
| AOV | Varies, but LTV should be 3x+ CAC | — |
| Return rate | 5-15% | >25% |
Consumer App (Ad-Supported)
| Metric | Healthy Range | Red Flag |
|---|---|---|
| DAU/MAU ratio | 20-50% | <10% |
| D1 retention | 25-40% | <15% |
| D30 retention | 8-15% | <5% |
| ARPDAU (ads) | $0.01-$0.10 | <$0.005 |
| Viral coefficient | 0.3-0.7 | Relying on k>1 for growth |
How to Use These Benchmarks
- Identify the business model type from the founder's description
- Compare their projections against the relevant benchmarks
- Flag deviations in the financial documents:
- If projections assume 1% monthly churn for an SMB SaaS → flag as optimistic, explain that 3-5% is typical
- If projections assume 50% gross margin for a pure software product → flag as pessimistic, ask what's driving costs
- Cite the benchmark when flagging: "Industry benchmark for B2B SaaS monthly churn is 2-5%; your model assumes 0.5% which would place you in the top 1% of all SaaS companies"
- Note that early-stage startups often perform worse than benchmarks — these represent what good companies achieve at scale, not what a pre-revenue startup should expect on day one