‘Q2T3’ is the ‘freakish’ new growth benchmark for AI startups

A new growth metric is doing the rounds in Silicon Valley that shows how exuberant investors have become about generative AI.

In a new State of AI 2025 report, Bessemer Venture Partners introduced a growth benchmark that sets a high bar for today’s AI startup ecosystem.

Called Q2T3 — short for quadruple, quadruple, triple, triple, triple — this metric signals a dramatic departure from the SaaS era’s more measured growth expectations, typified by the “T2D3″—triple, triple, double, double, double— playbook.

“We share these admittedly freakish new benchmarks to showcase the reality of standout AI startups of the moment,” Bessemer wrote.

Bessemer didn’t name any specific startups. However, the firm said that it came up with this new metric by studying 20 high-growth, durable AI startups across its portfolio and beyond, including Abridge and Cursor.

Escalating Expectations

Bessemer usually releases a “State of the Cloud” report each year. This year, the VC firm changed it to the “State of AI,” a sign of how much generative AI is changing the tech industry, upending cloud computing, and pressuring established software business models.

T2D3 became the north star for SaaS startups during the last decade.

This metric required startups to triple their annualized recurring revenue in the first year, then do it again in their second year. Then, they had to double ARR in the third year, and repeat that feat in years four and five.

In theory, this would get ARR from $1 million or $2 million to more than $100 million in about five or six years — enough to earn a potential valuation of $1 billion.

Bessemer thinks T2D3 is now being rapidly eclipsed by AI-native companies, which are demonstrating unprecedented velocity thanks to generative AI’s unique dynamics: rapid product cycles, explosive user demand, and new distribution channels.

Enter Q2T3, a far more aggressive trajectory. The new benchmark reflects a faster path where AI startups quadruple revenue in years one and two, and triple ARR in each of the next three years, according to Bessemer.

This implies growing ARR from $3 million to more than $100 million in just four years, and then more after that — a feat that redefines what hypergrowth means in a post-ChatGPT world.

“Shooting Stars” vs “Supernovas”

Bessemer’s Q2T3 model is based on a new archetype it calls “Shooting Stars.” These are AI startups that grow meaningfully faster than SaaS counterparts, while maintaining capital efficiency, solid gross margins (~60%), and strong product-market fit.

According to Bessemer, these startups achieve roughly $3 million ARR in their first year of monetization and about $164,000 in ARR per employee.

Some AI startups are growing even faster, hitting $100 million in ARR in about 1.5 years. Bessemer calls these “Supernova” startups.

“These are at once the most exciting and the most terrifying startups we see,” the venture capital firm wrote in its report.

These numbers often come from situations where revenue may be fragile, driven by rapid adoption that may not reflect lasting value. Low switching costs, highly competitive markets, and thinly differentiated products can push profit margins toward zero or below, Bessemer warned.

In contrast, Shooting Stars find product-market fit quickly, retain and expand customer relationships, and maintain strong gross margins—slightly lower than SaaS peers due to faster growth and modest model-related costs. They grow faster on average than their SaaS predecessors, but at rates that still feel anchored to traditional bottlenecks of scaling an organization.

“These businesses might not yet dominate headlines, but they’re beloved by their customers and are on the trajectory to making software history,” Bessemer wrote.

“Freakish” but achievable

While Q2T3 seems “freakish,” the firm said it’s not impossible for AI startups to attain.

Generative AI has drastically compressed time-to-market, with faster development, deployment, and go-to-market cycles, and Bessemer argues that dozens of startups are already proving this curve is within reach.

Still, Q2T3 isn’t for the faint-hearted. Is it a new way to redefine startup success, or a sign of AI frothiness? Only time will tell.

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