Why The Rule of 40 is Becoming the Rule of 60 — and What You Can Do About It.
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The SaaS industry is shifting from the Rule of 40 (growth + profit margin ≥ 40) to the Rule of 60, driven by compressed valuation multiples, rising interest rates, and private equity becoming the dominant exit path. When PE finances deals with leverage, companies need 40%+ EBITDA margins to service debt — making the old R40 benchmark insufficient. The post explains the financial mechanics behind this shift with a concrete PE deal example, then offers 12 actionable strategies for GTM leaders: ignoring macro noise, reframing success around efficiency, raising prices, experimenting with sales model changes, building partner channels, improving deal velocity, embedding AI into workflows, and protecting customer trust during automation.
