IFO4
Loading...A SaaS sales efficiency metric computed as the ratio of net new ARR in a quarter to sales and marketing spend in the prior quarter. Magic number above one indicates that incremental sales spend produces ARR above its cost; values below 0.5 indicate that the go-to-market motion is in efficiency stress. The federation accepts magic number as a directional input rather than as authoritative evidence, and requires it to be reported with both numerator and denominator definitions disclosed under UFMS-001:3.2. Magic number across multiple quarters is more informative than a single point.
A coinage of Scale Venture Partners in the 2000s; the term entered general SaaS metrics vocabulary through the venture capital diligence canon.
Federation members reporting magic number disclose numerator and denominator definitions. Multi-quarter trend is required for accreditation evidence under MEV-Annex:4.1. Magic number used in isolation as the primary efficiency claim is challengeable as incomplete.
@misc{ifo4_glossary_magic_number,
title = {{Magic Number}},
author = {{IFO4 Federation Editorial Board}},
howpublished = {{IFO4 Federation Glossary, slug \texttt{magic-number}}},
year = {2026},
url = {https://ifo4.org/glossary/magic-number},
note = {Category: Unit Economics; key: MagicNumber}
}Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.