# What is Magic Number?

This quarter's revenue minus last quarter's, times 4, divided by last quarter's sales and marketing spend. Around 0.75 or higher is commonly read as efficient, but it ignores gross margin, so high model costs can hide behind it.

## In real work

Quarterly revenue rose from $2.0 million to $2.3 million after $1.5 million of sales and marketing spend, so Bianca's memo put the magic number at 0.8.

## Related terms

- [SAFE](https://prompthausapp.com/learn/safe.md)
- [Valuation Cap](https://prompthausapp.com/learn/valuation-cap.md)
- [Dilution](https://prompthausapp.com/learn/dilution.md)
- [Pro Rata](https://prompthausapp.com/learn/pro-rata.md)
- [Limited Partner](https://prompthausapp.com/learn/limited-partner.md)

## How is this different from Googling it?

Google gives a definition. Prompthaus pairs each term with how it shows up in standups, PRs, prompts, and design reviews. Then it quizzes you until the word sticks. One term a day on iPhone.

- Category: Venture
- HTML: https://prompthausapp.com/learn/magic-number
- App Store: https://apps.apple.com/us/app/prompthaus-ai-vocabulary/id6776314407