--- title: Cushion - Definition & Examples | RGM® Glossary url: https://realgrowthmatters.com/glossary/cushion/ updated: 2026-06-10 source_html: https://realgrowthmatters.com/glossary/cushion/ --- Growth Glossary — Definition SHT CUSHION # Cushion Margin between actual performance and covenant threshold. A working definition from the RGM marketing glossary. Margin between actual performance and covenant threshold. Term : Cushion Field : Private Equity Category : Capital & Investing ## What it means Look at it this way.Treat Cushion as a capital concept with a clear scope. Two people using the term should mean the same thing. Margin between actual performance and covenant threshold. In Capital & Investing, Cushion names a capital concept. Pin the meaning down early and the strategy stays coherent. ## The mechanics Keep this in mind.Cushion works one way for a lean team and another for a large one. The mechanics follow the context. Think of Cushion as context-bound. A small shop reads it simply; an enterprise reads it with more nuance. That is normal -- Cushion is shaped by audience and channel mix. Read Cushion without care and the plan wobbles; be precise and the read holds. The working rule is plain. Agree what Cushion covers first, then act on it. Skip that order and Cushion loses its shared meaning, and two teams end up measuring two different things. Here is the short version. ## When it matters Start here.Cushion earns attention at three moments: setting budget, choosing a metric, comparing options. Away from those, it waits. Bring Cushion in when a live choice hangs on it. In capital & investing work, that usually means one of three moments. Away from a decision, Cushion is background, not a lever. 1. **Setting budget.** Cushion points to where the next dollar should go. 2. **Choosing a metric.** Cushion flags whether the number you report is causal. 3. **Comparing options.** Cushion stops a tidy-looking comparison from misleading. ## A worked example One idea, plainly put.To make Cushion concrete, the case below uses a Series B marketplace and figures from public reporting plus RGM analysis. Look at a Series B marketplace. In a CAC-to-LTV review, Cushion drove the decision rather than sitting in a footnote. A baseline came first, then a single agreed meaning of Cushion, then the read: runway extended after re-pricing a 3:1 segment. Worked example for Cushion -- illustrative figures, RGM analysis | Stage | The step taken | Why it mattered | | Baseline | Took a before reading on Cushion. | A reference to judge against. | | Define | Agreed a single definition of Cushion. | Two people, one meaning. | | Act | A CAC-to-LTV review — one variable. | Only one thing moved. | | Result | Runway extended after re-pricing a 3:1 segment | A decision the data earned. | Figures for Cushion here are illustrative and marked RGM analysis. Copy the method, not the exact numbers. ## Failure modes to watch One idea, plainly put.Four failure modes recur with Cushion. Name them and they are easy to design around. - **One blanket rule.** Applying Cushion the same way everywhere. Split it by audience, channel, and business model. - **No anchor.** Quoting Cushion without a starting point. Always pair it with a baseline. - **Vanity focus.** Gaming Cushion instead of the result. Tie it to business value. - **Apples to oranges.** Comparing Cushion across firms raw. Adjust for pricing and cycle before you read it. ## Quick answers How is Cushion defined? Margin between actual performance and covenant threshold. Settle what Cushion covers first; the strategy follows from there. Why does Cushion matter? Cushion matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned. Where does Cushion get used? Cushion informs a decision -- most often a budget, a metric choice, or a comparison. The a Series B marketplace example above shows the pattern. What goes wrong with Cushion most often? Treating Cushion as one blanket rule and reporting it with no baseline. Both hide a soft assumption. Where can I go deeper on Cushion? Start with the related terms below, then read the guide on marketing mix modeling, plus what growth marketing is. How is Cushion defined? : Margin between actual performance and covenant threshold. Settle what Cushion covers first; the strategy follows from there. Why does Cushion matter? : Cushion matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned. Where does Cushion get used? : Cushion informs a decision -- most often a budget, a metric choice, or a comparison. The a Series B marketplace example above shows the pattern. ### Related guides ### Related terms