/magi

Purpose: Use this reference when Magi models SaaS, growth, runway, or investment outcomes. It preserves the key modeling traps, 2026 benchmark ranges, and alert thresholds used in strategic simulation.

Contents

• FM-01..FM-10
• SaaS benchmarks
• scenario design guidance
• Magi alert thresholds

Financial Modeling Pitfalls & SaaS Benchmarks 2026

Financial Modeling Anti-Patterns

SaaS Benchmarks

Core Metrics

Churn Benchmarks

Additional churn split:

Voluntary churn:    2.6%-3.3%
Involuntary churn:  0.8%-1.1%

Scenario Design

Assumption Management

1. Keep assumptions separate from formulas.
2. Tag each assumption by confidence.
3. Reconcile assumptions monthly against actuals.
4. Run ±20% sensitivity on major assumptions.
5. Never ship only one scenario.

Checklist

• Churn is segmented.
• Expansion is modeled by mechanism.
• Step-cost thresholds exist.
• CAC is channel-specific.
• Seasonality is represented if material.
• GTM assumptions match the current motion.

Magi Alert Thresholds

Magi Integration

Use this with:

• SIMULATE for financial scenario construction
• ST-1 / ST-2 patterns when modeling MRR, runway, or cash flow
• ROADMAP when deciding pace, investment, or hiring capacity
• FORESIGHT when comparing model outputs against actual SaaS metrics

2026 AI-Native Modeling Addendum

When the business model includes AI inference as a primary cost driver, override classical SaaS assumptions:

Series B Fundability Filter (Carta + Bessemer 2026 read)

Bar in 2026:

• Growth + profitability margin >40% (Rule of 40)
• Burn Multiple <2.0x
• Disclosed plan to reach >75% gross margin within 24 months or defensible reason why 60-65% is structural

Companies missing all three are dropping out of the Series B-fundable pool that would have been raised in 2021 (Aventis Advisors 2026, High Alpha 2026).

Threshold Long Form (SKILL.md excerpt)

• Monitoring escalation (deviation-based): YELLOW at 5% deviation (team lead review + corrective plan); ORANGE at 10% deviation (department head + resource reallocation); RED at 15%+ deviation (executive review + strategic intervention). Legacy KPI-miss thresholds: YELLOW when 1-2 KPIs miss by <20% or assumption is WATCH; RED when major KPI miss >20% or assumption is BREACH; BLACK when multiple BREACH states invalidate the strategy.

• FORESIGHT thresholds: prediction accuracy (measured via MAPE — Mean Absolute Percentage Error) >0.80 = strong (industry benchmark for strategic forecast accuracy), 0.60-0.80 = review, <0.60 = weak — reassess drivers and assumptions; scenario bracket rate >0.85 = well-calibrated, 0.70-0.85 = good, <0.70 = widen range or review drivers; review forecast cycle time and variance attribution rate alongside accuracy.

• SaaS financial alert rules (2026 benchmarks): churn — B2B annual average 3.5%, top performers <3%, monthly <1% signals strong PMF, enterprise <0.5%; involuntary churn (failed payments) accounts for 20-40% of total churn — always decompose voluntary vs involuntary before escalating; churn >1.5x upper benchmark = RED; Burn Multiple >2.0x = RED; Rule of 40 <20% = YELLOW, >40% = healthy, >60% = elite (2-3× higher valuations; only 11-30% of SaaS companies achieve this); NRR — overall median 104-106% in 2025-2026 (segment medians: Enterprise ACV >$100K 118%, Mid-Market 108%, SMB 97%); <100% = RED for Enterprise/Mid-Market — for SMB, benchmark against segment median since SMB median is below 100%; top performers 120%+, elite 130%+ (2.3× higher valuations); CAC Payback >24 months = YELLOW (median 18-20 months per Pavilion B2B 2025 benchmarks, elite <12 months); CLV:CAC ratio <3:1 = YELLOW (target 4:1+). SaaS Triangle quick health check: Gross Margin 75%+, CAC Payback <18 months, NRR >101% — all three green = fundable baseline. Market context: median ARR growth 19-21% for 2025 cohort (High Alpha / Burkland 2025 SaaS Benchmarks — source: https://burklandassociates.com/2025/11/18/2025-saas-benchmarks-what-great-looks-like-and-how-to-reach-it/); sustainable growth valued over hypergrowth; 40%+ of new ARR from existing customers, emphasizing retention-led growth.

• KPI hygiene: limit to 3-5 strategic KPIs for executive focus, 8-12 core KPIs for leadership dashboard; update operational KPIs daily minimum, strategic KPIs weekly minimum; always pair leading indicators with lagging indicators; set SMART targets (specific, measurable, achievable, relevant, time-bound) drawing on historical performance and industry benchmarks.