Hurdle Stock

Management equity vesting above value threshold. A working definition from the RGM marketing glossary.

Schematic — Hurdle Stock

Management equity vesting above value threshold.

Term: Hurdle Stock
Field: Private Equity
Category: Capital & Investing

Definition in plain terms

Worth a slow read.Hurdle Stock is a capital concept your team should define once. A loose definition misaligns budgets and reporting.

Management equity vesting above value threshold.

Within Capital & Investing, Hurdle Stock is a capital concept. Get the definition right and the work that follows gets easier.

How operators apply it

Here is the short version.There is no single setting for Hurdle Stock. It bends to the audience, the channels, and the wider plan.

Hurdle Stock is not a switch you flip. It names a moving idea, and the way it plays out shifts with the setup. A lean team running one paid channel applies Hurdle Stock differently than a brand running ten. Use Hurdle Stock loosely and teams pull apart; pin it down and the math lines up.

Keep the order simple: define Hurdle Stock for your context, then decide how to act. Reverse it and the budget chases a number nobody agreed on. Start here.

Where it shows up

Hold that thought.Hurdle Stock earns attention at three moments: setting budget, choosing a metric, comparing options. Away from those, it waits.

Bring Hurdle Stock in when a live choice hangs on it. In capital & investing work, that usually means one of three moments. Away from a decision, Hurdle Stock is background, not a lever.

Setting budget. Hurdle Stock points to where the next dollar should go.
Choosing a metric. Hurdle Stock flags whether the number you report is causal.
Comparing options. Hurdle Stock adjusts a compare so the gap is honest.

A worked example

Worth a slow read.To make Hurdle Stock concrete, the case below uses a Bessemer-tracked SaaS firm and figures from public reporting plus RGM analysis.

Consider a Bessemer-tracked SaaS firm. Running a rule-of-40 screen, the team put Hurdle Stock at the center of the call. With a clean baseline and one fixed definition of Hurdle Stock, they read what moved: durable growth separated from cash-burn growth. The discipline is the lesson.

Example walk-through for Hurdle Stock -- figures illustrative, RGM analysis
Stage	The step taken	The reason
Baseline	Logged where Hurdle Stock stood before the test.	Something concrete to compare to.
Define	Fixed one meaning of Hurdle Stock for the test.	A shared definition up front.
Act	A rule-of-40 screen — one variable.	One change, a clean read.
Result	Durable growth separated from cash-burn growth	A call backed by the read.

These Hurdle Stock numbers are illustrative -- RGM analysis. The structure travels; the specific figures do not.

Mistakes worth avoiding

Pick one definition.Teams slip on Hurdle Stock in four familiar ways. Each makes a soft assumption look like a precise number.

No segments. Treating Hurdle Stock as one number for all. Break it out before you trust it.
Bare numbers. Showing Hurdle Stock on its own. Context is what makes it readable.
Wrong target. Treating Hurdle Stock as the goal. The goal is the outcome it predicts.
Apples to oranges. Comparing Hurdle Stock across firms raw. Adjust for pricing and cycle before you read it.

Frequently asked questions

What is Hurdle Stock?

Management equity vesting above value threshold. Agree the scope of Hurdle Stock before the planning starts.

Why does Hurdle Stock matter?

Hurdle Stock matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned.

Where does Hurdle Stock get used?

Teams put Hurdle Stock to work on a spend split, a metric, or a head-to-head call. See the a Bessemer-tracked SaaS firm walk-through above.

What goes wrong with Hurdle Stock most often?

Chasing Hurdle Stock as a goal and benchmarking it raw. Both bury the real trade-off underneath.

What should I read next on Hurdle Stock?

Browse the related terms below, then dig into what growth marketing is, plus marketing mix modeling.

What is Hurdle Stock?: Management equity vesting above value threshold. Agree the scope of Hurdle Stock before the planning starts.
Why does Hurdle Stock matter?: Hurdle Stock matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned.
Where does Hurdle Stock get used?: Teams put Hurdle Stock to work on a spend split, a metric, or a head-to-head call. See the a Bessemer-tracked SaaS firm walk-through above.