Adlega Blog:
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Product-Led Growth (PLG): Definition, Examples & vs Sales-Led
Product-led growth (PLG) is a go-to-market strategy where the product itself drives acquisition, conversion, and expansion — letting users try and adopt it with little or no sales involvement. Used by Slack, Zoom, Dropbox, and Canva.…
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Product-Market Fit
What is Product-Market Fit? Product-Market Fit (PMF) means creating something people want so much they’re telling others about it! Think of it as the perfect match between your product and your customers’ needs 💝 It means: Your product solves a real problem Customers love using it They’re willing to pay for it They recommend it…
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Bootstrapping
What Is Bootstrapping? Bootstrapping means building a company using your own resources, without external funding, like angel investors or venture capitalists etc. Think of it as being your own investor! 💪 What bootstrappers typically use: Personal savings Cash flow from sales Credit cards Friends & family loans Side gig income 👆 By the way, an…
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Venture Capitalist: What They Do & How They Make Money
A venture capitalist (VC) is a professional investor who manages a fund of other people's money and invests it in high-growth startups. VCs make money through management fees and carried interest — the '2 and 20' model — and take active roles like board seats.…
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Angel Investor: Definition, Examples & vs Venture Capital
An angel investor is a wealthy individual who invests their own money in early-stage startups in exchange for equity — typically $10K–$500K plus mentorship and connections. Unlike VCs, angels use personal funds, invest earlier, and decide faster.…
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Accounts Receivable (AR): Definition, Formula & vs Payable
Accounts receivable (AR) is money customers owe you for products or services already delivered but not yet paid for. It's a current asset on the balance sheet — the opposite of accounts payable (AP).…
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Net Revenue Retention (NRR)
What is Net Revenue Retention (NRR) in SaaS? Net Revenue Retention measures how much recurring revenue you keep from existing customers over time, including expansions , upgrades , downgrades , and cancellations. 👆 By the way, an interesting fact: High NRR companies (120%+) typically trade at 18-22x revenue multiples, while low NRR companies (less than…
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SaaS Gross Margin: Formula, Benchmarks & How to Calculate
SaaS gross margin is the percentage of revenue left after the direct costs of delivering your software — hosting, support, and infrastructure. The formula is ((Revenue − COGS) ÷ Revenue) × 100. Best-in-class SaaS exceeds 80%.…
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Free Cash Flow
What is Free Cash Flow? Free Cash Flow (FCF) is the actual cash a company has left after paying for everything it needs to maintain and grow its business. It shows: How much cash is actually available Ability to fund growth Financial flexibility True operational efficiency 👆 By the way, an interesting fact: Warren Buffett…
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SaaS Rule of 40
The SaaS Rule of 40 says a healthy software company's growth rate plus profit margin should add up to 40% or more. It balances growth against profitability — you can hit it by growing fast, being profitable, or anything in between.…
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SaaS Magic Number
The SaaS Magic Number measures how efficiently your sales and marketing spend turns into new recurring revenue. The formula is (Net New ARR ÷ Prior-Quarter S&M Spend). Above 0.75 signals efficient, scalable growth.…
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SaaS Quick Ratio
What is SaaS Quick Ratio? SaaS Quick Ratio measures how much a company’s revenue is growing compared to its losses. It answers the question: “For every dollar of lost revenue, how many dollars of new revenue are we generating?” How to Calculate SaaS Quick Ratio? The Formula for SaaS Quick Ratio SaaS Quick Ratio =…