Churn Rate
Definition
Churn rate is the percentage of customers or revenue lost over a period. Logo churn counts customers; revenue churn counts dollars.
How it comes up in fundraising
Churn is the denominator of every SaaS growth story: high churn means new sales pour into a leaking bucket, and investors price it accordingly.
Frequently asked questions
What is acceptable churn for a startup?
Rules of thumb: under 2 percent monthly logo churn for SMB SaaS and near-zero for enterprise; revenue churn should trend better than logo churn as accounts expand.
What is negative churn?
When expansion revenue from existing customers exceeds losses from departures, making net revenue retention exceed 100 percent.
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