From $1m to $100m revenue with Notion Capital: START, BUILD, SCALE.

People often think of the entrepreneurial startup journey - building a VC backed tech company - as a linear process. It isn’t. Things change dramatically as companies grow and the “people, process and tech” that make a company successful at one stage will most likely make them unsuccessful at the next. 

The fact that the startup journey is tough, fraught with risk and often chaotic is well understood. The fact that it is discontinuous, less so. 

Achieving $100m in revenue and doing so within ten years, is a critical milestone for VC-backed SaaS founders and companies.  Why ten years? And why $100m revenue? Well ten years is the typical term of the majority of VC funds, but more importantly because markets, technology and competition can change rapidly, disrupting startup journeys.  If a company does not hit $100m revenue in less than ten years from founding it seems to become less likely not more. And $100m in revenue because that has a far stronger correlation with enduring value and the ability to create a consequential business than unicorn status.

It’s important to acknowledge the probability of success; the chance of hitting $100m revenue in less than ten years is incredibly low. We analysed 17 years data of SaaS and Cloud companies and found that only 1.2% of the companies that raised more than $3m achieved $100m revenue, and less than 0.8% achieved $100m revenue in less than ten years, one in 125 companies. 

However, there is a venture uplift effect resulting from the involvement of tier 1 VCs, The likelihood of a start-up hitting $100m revenue is 15x more likely when backed by a tier 1 VC.  Put simply, the best founders seek out the best VCs and vice versa and both force each other to improve. It is a forcing mechanism that breeds success.

Growth is a step function. 

1% of VC backed companies (that raised more than $3m) achieve $100m in revenue in less then ten years. Therefore 99% of companies do not. 

Our research further highlights that:

  1. Approximately 20% of startups never get going - they fail to find product market fit and stall and then die with less than $1m ARR. This $1m ARR mark is critical. It marks the foundation of the business and many fail at this stage. Another 20% pass $1m but fail to reach $3m ARR, never moving beyond founder-led sales. These companies almost certainly die or are acquired for a fraction of the amount raised. If acquired, they will be one of those ‘amount undisclosed’ exits you so often read about;
  1. Another 20% stall somewhere between $3m and $10m revenue, failing to establish a repeatable GTM  model. If they move to break even or cash flow positive they may be acquired, perhaps generating a modest return for stakeholders. $30m ARR is the next big hurdle and another 20% fail to create the innate repeatability and scalability to pass this hurdle. They recapitalise and re-invent or are acquired, with perhaps a 5-6X multiple on revenue - assuming they have moved to a low burn or cash flow positive mode - and a modest return for stakeholders;
  1. However the final 20% transition through all these stages to $30m ARR plus. This is where real value starts to manifest. If they manage this barrier with strong unit economics, and decent growth - 50% plus - they can reach $100m in another three years. But - as tech and organisational debt creeps in, competition increases and markets change, growth slows and very few of them make it to $100m revenue.  Based on our analysis, less than 5% of the 20% make the transition to $100m in revenue and beyond.

Revenue milestones and organisational complexity combine to create real barriers to success, with common mistakes at each stage.  Andy Leaver, Notion Capital Operating Partner, describes these revenue challenges as “the rule of 1’s and 3’s: “In particular what makes a company successful at 0-1 or 1-3m revenue will not only not make them successful at 3-10 or 10-30, it will lead directly to their failure.”

  1. From 0-$1m - the priority is establishing the basis of product market fit and we all know how hard that is, while from from 1-$3m - the company needs to move beyond founder-led sales, validate an early go-to-market model and establish a viable target market;
  2. From $3-$10m - the overarching challenge is creating the go-to-market model and putting in place the processes and systems to enable consistency and repeatability; while from $10-$30m - success is built upon an increasingly consistent, repeatable and predictable playbook for growth;
  3. From $30-$100m - the business is managing complexity, introducing new products, entering new markets, exploring M&A and more.
  4. $100m revenue - plus the company is seriously looking at the potential to be an enduring giant, a multi billion acquisition or life post a public listing.

Just as challenging are the crisis points that arise from rapidly scaling organisations from 30 to 100 people, from 100 to 300 people, 300 to 1,000 people on so on. The rule of 1’s and 3’s again. Each stage requires a different set of systems, skills and capabilities. At every level of the business, from the most senior executives to the individual contributors and across every function, context is everything. 

What stage is the business at? What matters most right now? What mistakes should be avoided? Who should we hire? Who should we fire? How should we organise? How will we lead, manage and align our people to do their best work? Simple questions to ask, hard to answer, even harder to deliver on.

Growth is not continuous. Growth is a step function. 


Notion’s START, BUILD, SCALE framework encapsulates our thinking on this discontinuity and is designed to support our founders and their leaders on this journey, to help them avoid the mistakes so many make and to increase their chances of success.

  1. From the craziness of the initial chaotic years, where a bunch of amazing people do whatever it takes to build a product customers will buy…
  2. To the hard slog of creating the processes and systems to ensure repeatability across the customer life cycle…
  3. And from there to an industrialised machine, managing complexity, operating across multiple markets, with multiple products, through multiple channels.

We call these stages: Start, Build and Scale.

We like these words because they talk specifically to the challenge.  They work as verbs to describe the work being done: starting, building, scaling and they work as nouns to describe the people you hire: starters, builders and scalers.

START: Are you solving a problem that is truly worth solving and are you solving that problem for a small group of customers that love what you do and generalise to a very large market?

BUILD: Can you solve that problem consistently, repeatedly and predictably?

SCALE: Can you create a machine that drives increasingly productive growth across multiple markets?  

We consider start-build-scale from three perspectives:


Strategy is about choices and focus. What to do when and what not to do. It is all about context and trade offs. The context of the stage and the trade offs of which customers to choose. Which products to build. Which markets to enter. Which companies to buy. And also critically the order in which things are done.  Start, Build, Scale is a strategic framework that describes what needs to be done when. 

Effective strategy is not just about deciding what a company will do but what it will not do. In other words, it involves making choices about where to allocate resources, how to differentiate from competitors, and how to create sustainable competitive advantage and market power. Building the capabilities and developing the processes appropriate to the stage - not over investing or under investing. These clear and deliberate choices set companies apart from their competitors. 

As a company moves from one stage to the next, from Start to Build and Build to Scale, this is a dialogue that binds and aligns the business.


Tech companies run on people, not tech. The technology is an enabler. But ultimately it is people that make the decisions, people that drive the business and people that amount to more than 70% of the cost.

As a company adds people, complexity grows and entropy increases. Crisis points emerge and challenges abound at every level:

The Founding CEO is on an extraordinary journey, as they navigate the multiple different stages of the business moving from “Fearless Warrior” to “Considered Architect” to “Wise Monarch”, as encapsulated in Rachel Turner’s book, The Founder’s Survival Guide.

The Senior Leadership Team goes through multiple transitions, from generalists to specialists to leaders of leaders. At each stage, creating a healthy and high performing team is critical and is the reason we have been partnering with The Table Group since 2017. Their ‘Five Dysfunctions of the Team’ is in our opinion the seminal work on the topic of creating smart and healthy teams.  

The board also should evolve, supporting the changing needs of the business and providing strategic guidance. For a venture-backed tech company, the board ensures alignment between the investors and the leadership team. The challenge for founders and CEOs is not just to “tick the box” but to ensure the board is effective, productive and high performing

Across all management teams we need the right people, in the right roles with the skills to lead and manage effectively. Leadership must align with culture, values, and hiring objectives; with clear communication and a values-driven culture to create a cohesive and consistent experience. In this article Joobee Yeow describes the inflection points of organisational growth


The life stages of START, BUILD and SCALE align with three critical commercial challenges: finding product market fit, developing go to market fit and ultimately multi-market fit.

Each stage is profoundly different, but three things hold true throughout…

  1. Focus is paramount: if I know who my best customers are, wouldn’t I always want my resources pointed at winning them and making them successful? 
  2. Repeatability: I need to know how to win those best customers and make them successful over and over.
  3. Mechanisation: Think of growth as an engine - every component must run smoothly, and be tuned and optimised.

Every company we have ever invested in is different. What will make them successful is unique. However they have much in common, allowing them to support each other better and better and for us to provide the context from observing the patterns of success and failure, of common principles and best practices underpin the success and the mistakes that undermine even the best.

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