🚀 VC Startup Revenue Expectations

Gregory Henson
Jun 2
2 min read

What Are Realistic Revenue Expectations for Startups?

At Henson Venture Partners, we work with founders who dream big—but it’s just as important to grow smart. One of the most common questions we get from early-stage SaaS companies is: “How fast should we be growing to stay attractive to investors?”

The answer? There’s a playbook—especially in SaaS. And while every company is unique, venture capitalists follow some clear benchmarks when evaluating your performance and funding your next round.

🚀 The Standard VC Growth Trajectory

For venture-backed SaaS startups, the expectation is often summarized in a simple rule:

“Triple, Triple, Double, Double, Double.”

This means:

Triple your ARR (Annual Recurring Revenue) in your Seed to Series A
Triple again between Series A to Series B
Then double revenue each round until your exit—whether that’s a strategic acquisition or IPO

Let’s say you raise your Seed round with $500K ARR:

Series A: ~$1.5M
Series B: ~$4.5M
Series C: ~$9M
Series D: ~$18M+

This growth curve isn’t just desirable—it’s expected by most VCs for companies chasing category leadership.

💸 How Much Should You Spend to Get There?

To hit these milestones, your marketing and customer acquisition strategy must scale with your revenue. And that means knowing how to allocate capital correctly.

Here’s a solid rule of thumb:

Spend 20–50% of each funding round on marketing and customer acquisition
Your total marketing budget should land between 10–30% of your ARR

This means if your company is doing $1M ARR, a healthy marketing spend is somewhere between $100K–$300K annually—depending on your growth rate, CAC (customer acquisition cost), and margins.

👉 Spending less than 10%? You may not be fueling growth enough.👉 Spending more than 30%? You're likely inefficient—or buying unsustainable growth.

🎯 Why This Matters to Investors

VCs don’t just look at revenue in isolation—they analyze your efficiency of growth:

How much are you spending to get a dollar of ARR?
Is your CAC to LTV (Customer Acquisition Cost to Lifetime Value) ratio improving?
Are you building a repeatable, scalable growth engine—or just throwing money at ads?

Efficient growth is what separates the startups that raise again from those that flame out.

🔁 Summary

If you want to raise serious capital and build a venture-scale company, keep this in mind:

Aim to triple your revenue early, then double each round after
Allocate 20–50% of your raise to marketing
Ensure your marketing budget stays between 10–30% of your ARR
Focus on efficiency metrics like CAC, LTV, and payback period—not just top-line growth