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Ready to hit $1bn valuation in 5 years?

 If you're an entrepreneur with big ambitions, you probably know better than anyone just how important it is to have a big vision and a plan for how to achieve it. One such big hitting framework is "triple triple double double double", also known as T2D3. This is not only a metric but also a method for a SaaS startup to get to a $1bn valuation in 5-7 years. Starting from $1 to $2 million in ARR, or annual recurring revenue, you triple it, then triple it, then double it, double, double it which will get you to $100mm ARR . It’s definitelynot the only way to achieve goals and hit high valuations, but it is one provenmethod, for example by Zendesk or Netsuite.  

A pre requisite to make this work will be a really strong product market fit. To do this you will need to develop the right product and feature to really address the top painpoints for customers. To know if you really are doing this, be sure to analyze insights or survey clients. 

If you are aiming for T2D3 you also need to pinpoint your target market and transition from founder led sales to hiring and developing a strong sales team.

What does all of this mean for burn rate? Well, it'll be really high and front loaded. You’ll be spending heavily on product costs and customer acquisition (CAC). You’ll need to find, hire and train sales staff well before they will start generating revenue and invest in marketing and advertising.  Once your sales staff do start generating revenue, CAC payback needs to be factored in before you see a positive ROI. If you happen to miss revenue targets, cash burn will be even wider and course correction is difficult. 

In order to stay on track with your objectives, you should have a budget in place, including scenario analysis so you can plan for what you will do if revenue targets come in lower. Also keep stakeholders like board members and investors aligned on the potential scenarios. Play very close attention to your cash forecast and remember for additional fund raising it should be done early on from a position of strength.