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Startup metrics

MRR growth calculator

Investors ask "how fast are you growing month on month?" This gives the compound rate between any two MRR figures.

Compound monthly growth9.6%
Annualised growth200.0%
ARR run rate now$720,000
MRR in 12 months at this rate$180,000

The projection assumes the same compound rate continues for twelve months, which rarely happens; treat it as a reference point.

How it works

Compound monthly growth rate smooths out noisy months: it is the constant monthly rate that would take you from the starting MRR to the current MRR over the period.

Early-stage investors often look for 10% to 20% monthly growth at seed; the rate naturally slows as revenue grows.

The formula

  1. RatioMRR now / MRR at the start.
  2. CMGRRatio ^ (1 / months) - 1.
  3. Annualised(1 + CMGR) ^ 12 - 1.

Worked example

Growing from $20,000 to $60,000 MRR over 12 months is a 9.6% compound monthly growth rate, or 200% a year.

Put the numbers in your data room

Show the monthly MRR series, not just two points, in the data room. Investors look at the shape of the curve as well as the average.

MRR growth calculator FAQ

What is a good monthly growth rate?

At seed, 10% to 20% a month is often cited; growth slows as the base grows.

Why compound instead of average growth?

Averages of monthly percentages overstate growth when months vary; CMGR does not.

MRR or ARR?

Same thing at different scales: ARR = MRR x 12 for subscription revenue.

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