Jason M. LemkinCEO, SaaStr · Co-Founder of SaaStr AI, SaaStr Fund, Adobe Sign

The Optimal Cost Per Employee for Public SaaS Software Companies The Ultimate Guide

18 May 2024 · 1 min

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Jason M. Lemkin breaks down how much public SaaS companies spend per employee. Most sit at $300k to $400k, with HubSpot around $310k and Cloudflare at $400k. Raising capital helps firms reach those benchmarks, though the range historically spans from $100k to $1 million per employee.

Questions this video answers

Approximately $1,000,000 per employee.

$100,000 per employee.

Approximately $250,000 per employee (fully burdened).

$300,000 to $400,000 per employee.

Approximately $310,000 per employee.

Chapters

Now the pendulum swung back. So we were historically, we're at a million per employee. The Low Point was 100,000 per employee, when employees in the Bay Area probably cost you $250,000, fully burdened with insurance benefits, this and that. So you're losing 150,000 per employee. Now, every public company, at least public SaaS software company is at 300 to 400,000. HubSpot's at 310, which we talked about. Cloudflare is at 400. That's where you have to be. When do you have to be there? So one way to think of if you're lucky enough or unlucky enough, depending on how you look at it, to raise capital, angel money, venture capital, whatever, it bridges the gap. It bridges the gap to get you to three to $400,000 per employee. But you're going to have to get there.