Full Definition
Growth rate measures how quickly a startup is expanding, typically expressed as a percentage increase in revenue, users, or other key metrics over a specific time period. It's one of the most important metrics for fundraising.
Key Growth Metrics
- MoM Growth: Month-over-month growth rate
- YoY Growth: Year-over-year growth rate
- CAGR: Compound Annual Growth Rate
- T2D3: Triple, triple, double, double, double — the ideal SaaS growth pattern
Growth Rate Benchmarks
- Great: 15-20% month-over-month revenue growth
- Good: 10-15% month-over-month
- Average: 5-10% month-over-month
- Concerning: Less than 5% month-over-month
Paul Graham (Y Combinator) has said that the ideal weekly growth rate for a startup is 5-7%, which compounds to 12-17x annual growth.
Real-World Example
A startup growing from $50K to $200K MRR in 12 months has approximately 12% month-over-month compound growth rate.
Related Terms
Evidence of market demand and business momentum, demonstrated through metrics like users, revenue, or engagement.
Predictable, recurring revenue from subscriptions, measured monthly (MRR) or annually (ARR).
The stage where a product satisfies strong market demand, indicated by rapid organic growth.
The first major institutional venture capital funding round, typically following seed funding.
The direct revenues and costs associated with a single unit of a business model (typically per customer).
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