Compounding is the mathematics founders use for revenue targets and investors use for returns: a constant growth rate applied repeatedly to a base.
Read the curve honestly
Five years of 25 percent growth is 3.05×, not 2.25× — that is the point of compounding, and also its danger: the same curve that flatters a five-year plan punishes a five-year miss. Model downside scenarios at half your target rate before you bank on the top-line plan.
Frequently asked questions
Is this monthly or annual compounding?
Annual, applied once per year — the standard for CAGR-style revenue projections. For investment products with monthly compounding, use the investment-growth tool from your bank.
Connectica provides information only, not financial, investment, legal or tax advice. Figures on this page are estimates and generalizations — confirm anything that matters with the relevant professional or authority.