What is a good CAGR for a startup?

It depends on stage. Early-stage startups often grow revenue well over 100% a year from a small base; mature companies growing 15–25% a year are doing well. Compare with companies at a similar size and stage.

What is the difference between CAGR and IRR?

CAGR uses only a start and an end value. IRR accounts for every cash flow in between, so it is the right measure when money goes in or out more than once.

Can CAGR be negative?

Yes. If the ending value is below the starting value, CAGR is negative: the average yearly rate at which the value shrank.

How do I calculate CAGR in Excel or Google Sheets?

Use =(end/start)^(1/years)-1, or the RRI function: =RRI(years, start, end). Format the cell as a percentage.

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CAGR calculator: compound annual growth rate

Compound annual growth rate (CAGR) is the steady yearly growth rate that would take a starting value to an ending value over a number of years. It smooths out uneven years into one comparable number, which is why investors use it for revenue, users and returns.

Starting valueRevenue, users or an investment, any unitEnding valueYears

CAGR: 49.5%
Total growth: 400%
Multiple: 5.00x
Value in 1 more year at this rate: 14.95

The formula

CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1.

Example: revenue that grows from ₹2 crore to ₹10 crore in four years has a CAGR of (10 ÷ 2)^(1/4) − 1 ≈ 49.5% a year. Revenue growing exactly 49.5% every year would land on the same ₹10 crore, even if the real years were 30%, 90%, 40% and 45%.

How founders use it

CAGR is a quick way to compare growth across companies of different sizes and time spans: a pitch deck showing revenue CAGR, an investor comparing portfolio returns, or a market report quoting how fast a sector is growing. It is also useful in reverse: if you need to reach ₹50 crore in five years from ₹5 crore today, you need about 58% CAGR.

What CAGR hides

Volatility: two companies with the same CAGR can have very different, and differently risky, paths.
Timing: picking a strong starting year or a weak base can flatter the figure.
Cash flows in between: for investments with money added or withdrawn over time, use IRR instead.

CAGR for revenue, users and markets

The same formula works for any quantity that compounds. Founders use it for revenue and paying customers; analysts use it for market size, where a report might say a sector will grow from $10 billion to $25 billion by 2030. Check the base year and the end year behind any CAGR you quote, because the same market can show very different rates depending on the window chosen.

Frequently asked questions

What is a good CAGR for a startup?: It depends on stage. Early-stage startups often grow revenue well over 100% a year from a small base; mature companies growing 15–25% a year are doing well. Compare with companies at a similar size and stage.
What is the difference between CAGR and IRR?: CAGR uses only a start and an end value. IRR accounts for every cash flow in between, so it is the right measure when money goes in or out more than once.
Can CAGR be negative?: Yes. If the ending value is below the starting value, CAGR is negative: the average yearly rate at which the value shrank.
How do I calculate CAGR in Excel or Google Sheets?: Use =(end/start)^(1/years)-1, or the RRI function: =RRI(years, start, end). Format the cell as a percentage.

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Results are estimates for planning and learning, based only on the numbers you enter. They are not financial, tax or investment advice.