The median Series A bar rose to $3 million in annual recurring revenue by the second quarter of 2025, up from just above $1 million in 2021, according to Carta's Head of Insights, Peter Walker (Carta). Walker also reported that only about 20 percent of seed-stage startups now make it to a Series A. The bar tripled in four years and the odds of clearing it did not improve. That combination punishes founders who track the wrong number for their stage.
There is no single metric that matters across a company's life. The number that should worry a seed founder is close to useless to a Series C founder. The framework below maps the metric to the stage.
Seed: are you default alive or default dead
Paul Graham's distinction, laid out in his essay "Default Alive or Default Dead?", is binary: a startup is default alive if it will reach profitability on its current trajectory without raising again, and default dead if it runs out of cash first (Paul Graham). Graham's point is that most founders do not know which one they are, and every founder should. At seed stage, before there is enough revenue for ratios to mean anything, this is the only question that matters.
The companion number is the burn multiple: net burn divided by net new ARR, a framework David Sacks of Craft Ventures published in 2020. Sacks calls a burn multiple under 1x "amazing," under 2x "good," and treats 2x as a reasonable ceiling for an early-stage company (Craft Ventures). A seed company burning $2 for every $1 of new ARR sits inside the acceptable range. One burning $4 for every $1 does not, regardless of how the growth chart looks in isolation.
Series A: the ARR bar and the unit economics floor
Clearing the Carta-reported $3 million ARR threshold gets you in the room, but it does not get you the check. David Skok of Matrix Partners set the widely cited floor for unit economics at a 3x ratio of lifetime value to customer acquisition cost, a benchmark from his "SaaS Metrics 2.0" framework. Skok is explicit that 3x is a viability floor, not a target, and that top public SaaS companies often run closer to 5x (For Entrepreneurs). A founder hitting the ARR number with a 1.5x LTV:CAC ratio has a revenue number and a business model problem in the same pitch.
Growth stage: can you actually triple, triple, double, double, double
Once a company clears Series A, the operative question shifts to trajectory. Battery Ventures general partner Neeraj Agrawal published the "T2D3" framework showing that Marketo, NetSuite, Omniture, Salesforce, ServiceNow, Workday and Zendesk each roughly tripled annual recurring revenue for two consecutive years, then doubled it for three more years, on the way from about $2 million ARR to more than $144 million ARR before IPO (TechCrunch). That is the growth-stage scoreboard: not whether revenue is growing, but whether it is growing on that specific compounding curve. A company growing 60 percent year over year feels healthy until it is measured against T2D3 and found to be years behind the companies that actually reached the outcomes founders are raising growth rounds to chase.
Late stage: growth and profit, measured together
Brad Feld described hearing the Rule of 40, combined revenue growth rate plus profit margin adding to 40 percent or more, from a late-stage investor at a board meeting, and wrote that it applied to SaaS companies once they reached roughly $50 million in revenue, or about $1 million in monthly recurring revenue (Feld Thoughts). The number is a real filter. McKinsey's analysis of more than 200 software companies from 2011 to 2021 found they exceeded Rule of 40 performance in only 16 percent of company-years studied (McKinsey & Company). Growth alone stopped being the story long before most late-stage founders admit it. A company growing 25 percent with a 20 percent margin clears the bar. A company growing 60 percent while burning cash at a 40 percent negative margin does not, and public markets have shown they will discount it accordingly.
What to do with this before your next board meeting
Match the metric to the stage you are actually in, not the stage you are raising for. If you are pre-Series A, calculate your burn multiple this week and check it against the 1x-to-2x range Sacks lays out. If you are past Series A, run your LTV:CAC against Skok's 3x floor before you run it against your growth rate. If you are in a growth round, plot your last five years of ARR against the T2D3 curve instead of against your own prior year. And if you are at $50 million in revenue or past it, stop presenting growth rate and margin as two separate slides. Add them. That single number is what the next check writer is already calculating whether you show it or not.
Every founder should know if they're default alive or default dead. (Paul Graham)