SaaS Return on Capital Flywheel
See how capital flows through a SaaS firm and compounds sticky recurring revenue. Toggle Golden Section Lending to see what non-dilutive debt does to the math.
Your Inputs
Capital Invested $1,000,000
Initial S&M investment deployed into proven channels.
Sales Cycle 6 months
Average time from S&M spend to closed ARR.
Sales Efficiency Ratio 0.80×
S&M cost to create $1 of new ARR. Lower is better — 0.5× means $1 creates $2 of ARR.
Golden Section Lending
Borrow 40% against ARR — reinvest 90% of total ARR instead of 50%.
Year 5 Cumulative ARR
$37.4M
37.4× capital invested
SaaS Return on Capital
117%
Annualized over 4.7 years
ARR Multiple
37.4×
Ending ARR ÷ capital invested
Cumulative ARR Over 5 Years
| Period | S&M Deployed | New ARR | Cumulative ARR | With Lending | Delta |
|---|---|---|---|---|---|
| Period 1 (Mo 6) | $1.0M | $1.3M | $1.3M | ||
| Period 2 (Mo 13) | $625K | $781K | $2.0M | ||
| Period 3 (Mo 20) | $1.0M | $1.3M | $3.3M | ||
| Period 4 (Mo 28) | $1.7M | $2.1M | $5.4M | ||
| Period 5 (Mo 35) | $2.7M | $3.4M | $8.7M | ||
| Period 6 (Mo 42) | $4.4M | $5.4M | $14.2M | ||
| Period 7 (Mo 49) | $7.1M | $8.9M | $23.0M | ||
| Period 8 (Mo 56) | $11.5M | $14.4M | $37.4M |