The T2D3 framework — and why it matters
Triple, Triple, Double, Double, Double — coined by Bessemer Venture Partners — describes the growth trajectory of successful SaaS companies on the path from $1M to $100M ARR. Year 1: $1M → $3M (3x). Year 2: $3M → $9M (3x). Year 3: $9M → $18M (2x). Year 4: $18M → $36M (2x). Year 5: $36M → $72M (2x). Not every company follows this path — but it sets the benchmark against which Series A and B investors implicitly measure growth quality.
Growth benchmarks by stage
Seed ($0–$1M ARR): Month-over-month growth of 10–15% is strong. Investors focus more on trend and acceleration than absolute numbers. Series A ($1M–$5M ARR): 100–150% YoY growth is the expectation for top-tier deals. Below 80% YoY is a difficult conversation at most Tier 1 funds. Series B ($5M–$20M ARR): 80–120% YoY. Growth rate naturally decelerates as the base grows — investors expect this and model for it. Series C ($20M+ ARR): 50–80% YoY is strong at this scale. Rule of 40 becomes as important as raw growth rate.
How growth rate connects to your valuation multiple
The relationship is direct: higher growth rate = higher revenue multiple. A company growing 150% YoY at Series A typically commands 10–15x ARR. A company growing 60% YoY at the same stage commands 5–8x. The difference in valuation at $2M ARR is $20–30M vs $10–16M. Growth rate is the largest single lever in your valuation negotiation — which is why investors push for lower valuations when growth is decelerating.
Implied CAGR: what your term sheet is actually asking
When you accept a valuation, you're implicitly committing to a growth trajectory. If you raise at 15x ARR and the investor needs a 10x return over 5 years, your ARR needs to grow at roughly 80% CAGR to justify the entry price at exit. If you raise at 20x ARR, the required CAGR is higher. CAPLINK's Fundraising Calculator shows you exactly what CAGR is embedded in your term sheet — before you sign.