The Death of the $100M ARR Milestone
Why $100M ARR lost its magic number status, and the new benchmarks VCs use to evaluate growth-stage companies.
The Number
34 — that's how many private companies hit $100M ARR in 2025 without raising a growth round. Five years ago, $100M ARR virtually guaranteed a $1B+ valuation and a parade of growth equity offers. Today, it's table stakes. The bar has moved: investors now want to see $100M ARR with net revenue retention above 130%, gross margins above 75%, and a path to profitability within 18 months.
The Breakdown
The New Growth-Stage Scorecard
The era of 'grow at all costs' is definitively over, and the metrics VCs use to evaluate growth-stage companies have shifted accordingly. Here's the scorecard that actually matters in 2026:
Burn Multiple: The ratio of net burn to net new ARR. Best-in-class companies operate at 1x or below — meaning they spend $1 or less for every $1 of new revenue. Companies burning at 3x+ are essentially uninvestable at the growth stage now.
Rule of 40: Revenue growth rate plus profit margin should exceed 40%. A company growing 60% with -30% margins (Rule of 30) is less attractive than one growing 35% with 15% margins (Rule of 50).
Net Revenue Retention (NRR): This is the new north star metric. NRR above 130% means your existing customers are expanding faster than you're churning — compound growth without acquisition costs. Below 110% is a red flag.
Magic Number: Sales efficiency measured as net new ARR divided by sales & marketing spend. Above 1.0 means each dollar of S&M generates more than a dollar of new ARR. Most growth-stage investors won't touch companies below 0.5.
Deal Anatomy
Why Figma's IPO Filing Changes the Game
Figma's S-1 revealed something remarkable: $900M ARR with 90% gross margins and positive free cash flow. After the failed Adobe acquisition, many wrote them off. Instead, they used the time to build an enterprise motion that expanded their ACV from $15K to $85K.
The VC lesson: the best outcomes often come from companies that survive near-death experiences. Kleiner Perkins, Index, and Greylock — Figma's early investors — held through the Adobe drama and are now looking at 50-100x returns on their early rounds. Conviction through adversity is the defining trait of top-tier fund performance.
Tool of the Week
Burn Multiple Calculator
Since we just covered the new growth metrics, this week's tool is perfect: our Burn Multiple Calculator. Enter your monthly burn rate, net new ARR, and growth rate to see how efficiently you're converting capital into revenue. Compare your numbers against benchmarks by stage and sector.
The Edge
Three signals worth watching:
1. Sequoia is restructuring its scout program — reducing the number of scouts from 40+ to 15, but increasing their allocation. Quality over quantity in deal sourcing.
2. The median time from Series A to Series B stretched to 28 months — the longest since 2009. Companies that raised A rounds in 2023-24 at high valuations are struggling to grow into their price.
3. European VC hit a milestone: €20B deployed in Q1 2026, with London, Paris, and Berlin each producing unicorn-level rounds. The US-Europe VC gap is narrowing faster than anyone predicted.