SaaS companies that grow faster tend to invest more in every customer-facing function: sales, marketing and customer success
There’s a correlation between the overall growth rate of SaaS companies and their investment in marketing. Whether bootstrapped or equity backed, those startups that invest in marketing tend to have higher growth rates.
That’s my interpretation of data stemming from the 2025 Private B2B SaaS Company Growth Rate Benchmarks by SaaS Capital, which lends venture debt. The survey is now in its 14th year and polled more than 1,000 SaaS companies for its most recent report.
This one line stood out to me:
“Equity-backed companies report spending 89% more on sales and 100% more on marketing than bootstrapped companies.”
That underscores one of the biggest fears for bootstrapped companies. Better-funded competitors are spending 100% more on marketing, and by extension, PR too.
Good marketing fuels growth
Yet there’s another finding: equity-backed companies that invest more in marketing have a higher growth rate than near-peer competitors that are also equity-backed.
Further, this is also true for bootstrapped startups. Bootstrapped startups that invest more in marketing also have higher growth rates than other bootstrapped startups.
The report itself doesn’t elaborate, however, SaaS Capital provided further detail in a blog post on benchmark growth metrics:
“The difference between higher-growth bootstrapped companies and lower-growth bootstrapped companies is most noticeable in sales and marketing, with higher-growth companies (both bootstrapped and equity-backed) spending approximately 20% more on sales and 40% more on marketing.”
In other words, regardless of funding, startups that spend more on marketing have higher growth rates.
It’s not just marketing either. Companies that grow faster tend to invest more in every customer-facing function: marketing sales and customer success. That latter, customer success, is both related to marketing and crucial in SaaS. Forrester says, for example, 73% of growth comes from existing customers.
A related graphic from the blog post, which I’ve published nearby with written permission, illustrates the data:
(click image for higher resolution)
Yes, yes, correlation is not causation, but…
Correlation is not causation, but there is a difference worth considering when the correlation is strong.
This finding isn’t isolated. There’s plenty of other high-level evidence in the report and elsewhere. For example, previous editions of this survey show that the median growth rate for startups across all categories for the last three years has dropped:
- 2025: startups have a median growth rate of 25%;
- 2024: startups have a median growth rate of 30%; and
- 2023: startups have a median growth rate of 34%.
As growth rates have fallen, so too has investment in marketing.
Marketing leaders own some of the responsibility for that pullback. Too many B2B SaaS companies went after ‘bad fit customers’ under a mandate of ‘growth at all costs.’ Those customers churned, which tanks the subscription business model.
Consequently, investors leaned on companies to cut costs and the first bucket that gets cut is marketing.
The biggest marketing attribution experiment ever
Proving cause and effect has always been the Achilles heel of marketing. In B2B, there are too many variables for any one company to do a rigorous study with the efficacy that business demands:
- more decision makers are involved;
- growing number of touches required;
- lengthening buying cycles; and
- increasingly common buyer behavior to avoid conversations with salespeople until the final step.
Many marketing teams wind up spending about as much time arguing about marketing with the business as they do actually doing their job. Marketing leaders can easily do the same with their budget.
Clearly, measurement is important, but I’ve been arguing, philosophically, for a while now, the SaaS community has effectively performed the single largest marketing attribution experiment ever – since the tail end of 2023: They simply turned marketing off…and growth stalled.
As a result, investors and executives alike are coming to the realization that the new mantra of profitable growth doesn’t scale like they hoped. There’s evidence to suggest that marketing budgets are recovering, though other surveys, namely Gartner’s, are forecasting clawback.
Let’s hope that doesn’t happen because we know how that story ends. The savvy companies know that marketing is a game of momentum and cutting season is an opportunity to get ahead. Perhaps, too, at a lower cost-of-acquisition (CAC) when all your peers are pulling back on marketing spending.
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Early-stage B2B tech startups don’t invest enough in marketing [peer-reviewed study]
Image credits: Google Gemini and SaaS Capital
