Q: How do I calculate ARR growth rate?

YoY ARR Growth = (Current ARR - ARR 12 months ago) / ARR 12 months ago × 100. MoM Growth = (Current MRR - Previous MRR) / Previous MRR × 100. For consistency, use ARR snapshots at the same point each month/year. Common pitfall: including one-time revenue (setup fees, services) inflates ARR — only count committed recurring subscription revenue.

Q: At what ARR should I raise each funding round?

Rough fundraising ARR benchmarks (2024-2025 market): Seed: $0-500K ARR (pre-revenue also fine with strong team/vision). Series A: $1-5M ARR, 2-3x growth YoY. Series B: $5-20M ARR, clear path to $100M. Series C: $20-50M ARR, evidence of efficiency (Rule of 40). These are guidelines — compelling team/market/growth overrides ARR minimums.

Question 1

What is T2D3 and what growth rate does it require?

Accepted Answer

T2D3 (Triple, Triple, Double, Double, Double) is the benchmark growth trajectory for venture-backed SaaS: triple ARR in years 1 and 2, then double in years 3, 4, and 5. Starting at $1M ARR: Year 1: $3M. Year 2: $9M. Year 3: $18M. Year 4: $36M. Year 5: $72M. This requires roughly 10% MoM in early years, tapering to 6-8% MoM at scale.

Question 2

What is a good SaaS growth rate?

Accepted Answer

By stage: Pre-product-market-fit (<$1M ARR): 15-20% MoM is excellent. PMF found ($1-5M ARR): 10-15% MoM. Growth stage ($5-20M ARR): 5-10% MoM. Scale ($20M+ ARR): 3-6% MoM (still 30-60% YoY at this stage). The Rule of 40: Growth Rate % + Profit Margin % should exceed 40% to be considered a healthy SaaS business for investors.

Question 3

How do I calculate ARR growth rate?

Accepted Answer

YoY ARR Growth = (Current ARR - ARR 12 months ago) / ARR 12 months ago × 100. MoM Growth = (Current MRR - Previous MRR) / Previous MRR × 100. For consistency, use ARR snapshots at the same point each month/year. Common pitfall: including one-time revenue (setup fees, services) inflates ARR — only count committed recurring subscription revenue.

Question 4

At what ARR should I raise each funding round?

Accepted Answer

Rough fundraising ARR benchmarks (2024-2025 market): Seed: $0-500K ARR (pre-revenue also fine with strong team/vision). Series A: $1-5M ARR, 2-3x growth YoY. Series B: $5-20M ARR, clear path to $100M. Series C: $20-50M ARR, evidence of efficiency (Rule of 40). These are guidelines — compelling team/market/growth overrides ARR minimums.

SaaS Growth Rate Calculator — MoM, YoY Growth & ARR Projections

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