SaaStr published guidance stating that B2B SaaS companies require at least $1 on the balance sheet for every $2 in ARR to invest in team and product initiatives. At $20m ARR this equates to $10m in cash reserves. The article notes that companies below this threshold tend to hesitate on expansion decisions.
According to SaaStr, once a company passes initial scale at $3m-$4m ARR, cash levels below 50% of ARR create operational stress and lead to underinvestment.