Agora, Inc. American Depositary Shares

Asana, Inc. Class A Common Stock

CrowdStrike Holdings, Inc. Class A Common Stock

Datadog, Inc. Class A Common Stock

DocuSign, Inc. Common Stock

Fastly, Inc.

Fiverr International Ltd.

monday.com Ltd. Ordinary Shares

Cloudflare, Inc. Class A common stock, par value $0.001 per shar

Okta, Inc. Class A Common Stock

Palantir Technologies Inc. Class A Common Stock

SentinelOne, Inc.

Snowflake Inc.

Teladoc Health, Inc.

Unity Software Inc.

The Rule of 40 is used as a comparison metric for high growth SaaS companies that are not yet profitable.

The rule states that a company's revenue growth rate plus profitability margin should be equal to or greater than 40%.

Assumptions

- Based on most recently available quarterly results

- Operating Income used as measure for profitability margin

This is a single metric viewed in isolation. It makes for useful comparison but should not be solely relied upon when performing due diligence.

$DDOG $TDOC $SNOW $MNDY $CRWD $DOCU $NET $FVRR $PLTR $S $OKTA $ASAN $API $U $FSLY

![](https://cdn.commonstock.com/d6eb48a9286c080b742aa5653d3f39789201efe904552c64722b5808311b44ee-1024x690.png)

Rule of 40 is a great rule of thumb and can also be applied to companies that have slowing growth. Their profitability margin just needs to be expanding.

Young Money Capital

The Rule of 40

Wolf of Harcourt Street