Introduction

Most startups never hit big revenue. New data shows who makes it to $1M to $25M ARR, how long it takes, and what boosts your odds.

What's the problem it solves?

Founders often hear flashiest success stories and set unfair timelines. This study shows the real odds and pace so teams can plan better.

Quick Summary

Kyle Poyar used ChartMogul data on 6,525 software startups to see how many reach key revenue marks. Almost half get to $1M ARR within 10 years, but only 1 in 10 reach $10M and just 1 in 50 reach $25M in that time. Hitting $1M usually takes 2 to 5 years. Very few do it in under a year.

Cohorts matter. Startups that began charging in 2016 to 2019 were slightly more likely to reach $1M in 3 years. The 2021 batch struggled. The 2023 batch started strong, likely due to early AI focus. AI native startups are 3x more likely to hit $1M in 6 months and 8x more likely to hit $10M in 12 months, though under 1% still reach that mark so fast.

Place helps but does not decide your fate. Bay Area companies are more likely to break out early. Yet New York City and the rest of the US beat the Bay Area on reaching $10M in 5 years. France and Canada often reach $1M fast, but Canada rarely hits $10M in 5 years. Many well known winners took years to find product market fit, then grew fast once they had it.

Key Takeaways

• Nearly half reach $1M ARR in 10 years, but only 2% reach $25M in 10 years
• Time to $1M is usually 2 to 5 years, not months
• 2016 to 2019 vintages did better than later ones
• 2023 startups show strong early signs, likely due to AI focus
• AI native firms are outliers, but fast growth is still rare
• Bay Area improves odds early, but NYC and rest of US show better 5 year staying power
• Slow, steady work toward product market fit beats premature scaling

What to do

• Set honest milestones
  • Plan for 2 to 5 years to reach $1M ARR
  • Budget cash to survive the search for fit
• Chase fit before growth
  • Keep founder led sales until you see repeatable wins
  • Kill weak bets, double down on the offer that sticks
• Use AI with purpose
  • Build AI native where it clearly improves outcomes for users
  • Measure churn closely when early growth is fast
• Play the cohort you are in
  • If you started in a tough market, extend runway and narrow focus
  • If early signs are strong, lean in with a clear wedge and one channel
• Location strategy
  • Use the Bay Area for network and hiring if it helps
  • You can build endurance in NYC or elsewhere and still reach $10M
• Metrics to track weekly
  • New revenue, net revenue retention, payback, pipeline from one channel
  • Leading indicators of fit like win rate and sales cycle length

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