RVNU #027: Rep Job Security Calculator
The $420K ARR Reality Every SaaS Rep Needs to Know
Dear RVNU Community
Knowing whether you need to defend against being fired or position yourself for a raise in startup-land is far from easy, given the wild chaos of these environments. This newsletter is designed to help readers demystify the metrics that matter when it comes to rep performance management.
Free “Sales Rep Job Security Calculator”
For every newsletter subscriber you’ll get access to a calculator to determine:
a) Founders: if the targets you set are fair, and your team/ICs are performing sustainably
b) Reps: if your targets are fair, and/or whether you are in position to ask for a raise/defend against being fired.
Let’s take a deeper dive.
The Number That Determines Your Job Security
If you're earning $120K base + $120K bonus OTE, your company needs you to generate enough revenue to pay back your fully loaded cost within 12 months. Here's the brutal math:
📊 Your Survival Formula:
Your fully loaded cost ÷ Company's gross margin = Your minimum ARR target
What You Actually Cost (Not Just Your OTE)
Your real cost to the company:
Your OTE: $240K
Benefits, taxes, tools, overhead: ~40% more
Your fully loaded cost: $336K
With an 80% gross margin, you need to generate: $336K ÷ 0.8 = $420K ARR annually just to break even on your hire.
Is Your Quota Actually Fair?
Your quota should vary based on your company's stage and growth expectations:
Realistic quota ranges for $240K OTE:
Seed/Series A: $336K-$504K (still building market)
Series B/C: $420K-$630K (scaling proven model)
Series D+: $504K-$840K (mature efficiency expected)
The formula for any OTE: Your OTE × 1.4 ÷ 0.8 = your economic breakeven, then multiply by your stage factor.
Your stage factor is supposed to reflect the investment a founder is prepared to take in order to grow revenue. In venture backed startups that risk is typically greater the earlier they are. For example, founders are often prepared to lose money on reps in order to gain market traction. However, as they mature they being to reduce this elasticity as they strive to illustrate their startup is sustainable over the long-term and a real business.
In bootstrapped startups founders are under more pressure to at least break even on the fully loaded costs and hit an economic break even from the get-go.
You therefore might see the following stage factors enter the calculation in venture backed startups:
Where You Stand: The Performance Reality Check
Your Monthly Reality Check
What this means month-to-month:
Safe zone: $35K+ ARR closed monthly
Danger zone: Under $30K ARR closed monthly
Termination zone: Under $20K ARR closed monthly
What Most Reps Don't Realize
🚨 Hard Truths:
Your company isn't just measuring your quota attainment—they're measuring your payback period
Your quota should scale with your company's stage: early stage companies may accept lower multiples, mature companies expect higher returns
Being "likable" or "improving" won't save you if your numbers don't work
Top performers at $630K+ ARR are literally paying for underperformers to keep their jobs
In a tight market, anyone below economic breakeven is expendable
Job Security Calculator
🧮 Calculator
Use this link to access the free calculator (free to subscribers) to assess how you/your reps are performing relative to economic break even and your stage of growth. Use it as a guide to determine whether performance needs to improve, or warrants additional incentives.
How to Protect Yourself
💡 Survival Strategies:
Calculate your real target: Use the formula above for your OTE and company stage
Track your monthly run rate: Are you consistently above your breakeven monthly target?
Understand your value: If you're hitting stage-appropriate multiples, you have negotiating power
Be honest about your trajectory: Consistently below breakeven means update your resume
The Bottom Line
Your $240K OTE isn't guaranteed income—it's an investment bet your company made on you. They need different returns based on their stage, but at minimum you need to return your economic breakeven within 12 months.
If you're consistently below that number, you're not just missing quota—you're costing the company money they could spend on marketing, product development, or a rep who can actually hit the target.
The math is simple. The execution is up to you. And yes, the more you get paid, the more you're expected to sell.
Ask yourself: Are you generating enough ARR for your company's stage? If not, what's your plan to get there—fast?
Know your numbers. Protect your position. Hit your real target.
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Our mission is to help founders break through commercial barriers and build sustainable growth engines.
Onwards,
Wayne.
RVNU founder.