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CAGR Calculator (Compound Annual Growth Rate)

Use this free CAGR calculator to find the compound annual growth rate between any two values. Enter a beginning value, ending value, and number of years to instantly see your smoothed annual growth rate — perfect for revenue growth, investor metrics, and pitch decks.

$
$
25.7%
CAGR
2.5×
Growth Multiple
150.0%
Total Growth
YearProjected Value at CAGR
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How to Use This CAGR Calculator

  • Beginning Value — the starting amount (e.g. revenue in year 1).
  • Ending Value — the final amount (e.g. revenue in the last year).
  • Number of Years — the number of years between the two values.

What Is CAGR?

CAGR — compound annual growth rate — is the smoothed, constant annual rate at which a value would have grown to get from its starting point to its ending point. It strips out the year-to-year volatility and gives you a single, clean growth rate that is easy to compare across companies, investments, or time periods.

CAGR is the metric investors and founders reach for when describing growth, because raw multi-year growth can be misleading. Going from $100k to $250k is 150% total growth — but spread over four years that is a much more modest 25.7% per year. CAGR answers the question "how fast did this really grow, per year?" which is exactly what matters in a pitch deck, a board update, or an investment comparison.

CAGR Formula

CAGR = ( (Ending Value ÷ Beginning Value) ^ (1 ÷ Years) ) − 1

Multiply by 100 to express it as a percentage. The exponent of 1 ÷ Years is what converts total growth into a per-year compounded rate.

Example Calculation

Revenue grows from $100,000 to $250,000 over 4 years:

  • Growth multiple = $250,000 ÷ $100,000 = 2.5×
  • CAGR = (2.5 ^ (1÷4)) − 1 = 25.7% per year

So despite 150% total growth, the honest annual growth rate to put in front of investors is about 25.7%.

Common Mistakes to Avoid

  • Confusing total growth with CAGR. 150% over four years is not 150% per year — it is about 26%.
  • Using the wrong number of years. Count the periods between values, not the number of data points.
  • Applying CAGR to volatile data without context. CAGR hides the bumps; a smooth 25% CAGR could include a down year.
  • Cherry-picking start and end points. Starting from an unusually low year inflates CAGR misleadingly.
  • Forgetting CAGR is backward-looking. Past CAGR does not guarantee future growth.

CAGR for Startups & Founders

CAGR shows up everywhere in startup finance: revenue growth in your pitch deck, user growth in board updates, market-size projections, and investor return expectations. Using it correctly signals financial literacy; using it loosely (or confusing it with total growth) is a credibility risk in front of sophisticated investors.

When we build financial models and investor materials, growth metrics like CAGR are presented accurately and in context — alongside the assumptions that drive them. If you are preparing for a raise or a board meeting and want your growth story to hold up to scrutiny, that is exactly what our financial modeling team does.

Need help interpreting these numbers?

Our Ex-PwC Chartered Accountants help US startups and small businesses turn calculations like this into real financial strategy — pricing, cash flow, fundraising, and growth decisions.

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Frequently Asked Questions

What is a good CAGR?
It depends entirely on the context. For an established business, single-digit revenue CAGR may be healthy; for a venture-backed startup, investors often look for much higher rates. The useful comparison is against your industry and your own targets.
What is the difference between CAGR and average growth rate?
A simple average of yearly growth rates can overstate true growth because it ignores compounding. CAGR accounts for compounding and gives the single constant rate that actually connects your start and end values.
Can CAGR be negative?
Yes. If the ending value is lower than the beginning value, CAGR is negative, indicating an average annual decline over the period.
How many years should I use for CAGR?
Use the actual number of years between your beginning and ending values. Be consistent and avoid cherry-picking unusually high or low start points, which distorts the result.
Is CAGR the same as IRR?
No. CAGR measures growth between two single values. IRR accounts for the timing of multiple cash flows in and out. For a simple start-to-end growth rate, use CAGR; for investments with several cash flows, use IRR.

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