SaaStr · 2020-10-13
· 2059d
The 7-10 Year SaaS Journey: Why Building SaaS Takes a Decade
SaaS companies require significantly longer to build than consumer web businesses, typically taking 7-10 years to reach scale and 12 years on average to IPO. Founders must commit to sustained growth trajectories with realistic revenue projections, understanding that meaningful exits via M&A or IPO require substantial ARR milestones that take years to achieve.
Metrics in this report
Annual Growth Rate (Assumed)
100%
year-over-year
baseline projection through $50m ARR
IPO ARR Threshold
500$ millions
minimum
modern SaaS IPO standard
M&A Entry ARR Threshold
10-20$ millions
minimum
for healthy acquisition exit
Product-Market Fit Timeline
24months
minimum
to minimum sellable product and $1m ARR
Time to IPO
12years
average
SaaS companies
Time to Scale (Big)
7-10years
range
to reach significant scale
Time to Scale (Initial)
5years
typical
to reach $10m ARR