Monthly Growth Rate: The Pulse of Your Startup
Month-over-month revenue growth is the simplest and most telling sign of product-market fit. Here's how to measure it and what good looks like.
| Model | Seed | Series A | Series B | Top quartile |
|---|---|---|---|---|
| B2B SaaS | 15-20% | 10-15% | 5-10% | 15%+ |
| Consumer | 20-30% | 15-25% | 10-15% | 20%+ |
Monthly growth rate measures the percentage increase in revenue (or users) from one month to the next. It's the single number that VCs look at first when evaluating early-stage companies, because sustained compounding is what separates breakout startups from the rest.
What It Is
Monthly growth rate is calculated as: ((Revenue This Month - Revenue Last Month) / Revenue Last Month) x 100. For pre-revenue startups, substitute active users or another core engagement metric.
Why It Matters
Paul Graham famously said a good startup grows 5-7% per week. At the monthly level, top-quartile B2B SaaS companies sustain 15-20% MoM growth through seed stage, tapering to 5-10% by Series B as the base grows. B2C companies often see higher early rates (20-30%) but face steeper deceleration.
How to Calculate It
Start with MRR (Monthly Recurring Revenue). Include expansion revenue from upsells and subtract contraction from downgrades. New MRR + Expansion MRR - Churned MRR - Contraction MRR = Net New MRR. Divide by last month's starting MRR.
Startup Anecdote
Superhuman obsessed over growth rate during their invite-only phase. Rather than opening the floodgates, they kept their growth at a controlled 10-15% MoM while ensuring every new user hit their "wow moment." By the time they expanded access, their retention was so strong that growth actually accelerated — a rare feat past seed stage.
Key Takeaway
Sustainable growth beats explosive growth. A company growing at 15% MoM for 12 months will 5x revenue. Chase consistency, not spikes — and investigate any month where growth dips below your trailing three-month average.