Method and definitions
CAC payback = CAC ÷ (monthly revenue per customer × gross margin). Magic number = (current-quarter recurring revenue − prior-quarter recurring revenue) × 4 ÷ prior-quarter sales + marketing spend. Burn multiple = net cash burn ÷ net new ARR. Rule of 40 = annual revenue growth % + operating profit margin %.
Use recognised recurring revenue for the magic number, not ARR. Burn and net new ARR must refer to the same period; burn multiple is not meaningful for zero or negative net new ARR. Payback ignores churn and expansion. Rule of 40 uses the operating margin you supply, not EBITDA or cash margin. These are distinct planning metrics.
Reference: Scale Venture Partners: Magic Number Math.
Reference: David Sacks: The Burn Multiple.