K-factor, or viral coefficient, measures how many new users each existing user brings to the product through invitations, sharing, or referrals. It is calculated by multiplying the average number of invitations sent per user by the invitation conversion rate. K-factor above 1.0 means each user brings in more than one new user, creating exponential organic growth. Even a K-factor of 0.3-0.5 meaningfully reduces customer acquisition costs.
K > 1 means exponential organic growth. Even K = 0.3-0.5 meaningfully reduces CAC.
Each user sends 5 invites; 20% convert → K = 5 x 0.2 = 1.0 (viral breakeven).
Most B2B SaaS: K = 0.1-0.4. Strong viral products: K = 0.5-1.0+. Sustained K > 1 is rare.
Measuring one-time spikes vs sustained virality; not accounting for invite fatigue; ignoring quality of referred users.
Growth slide: K-factor with invite conversion rate and organic vs paid split.
K-factor 0.6; 40% of new users from referrals.
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