Yesterday I shared the math on the 10x rule for startup investors. To recap, investors aim for a 10x return on their money when they invest in early-stage companies. A 10x return equates to a 25.89% annual return, assuming the investment is held for 10 years.

So, what does a ~26% annual return over a decade look like on a year-by-year basis? Here’s a breakdown:

• Year 0: $100
• Year 1: $125.89
• Year 2: $158.49
• Year 3: $199.53
• Year 4: $251.19
• Year 5: $316.23
• Year 6: $398.11
• Year 7: $501.19
• Year 8: $630.96
• Year 9: $794.33
• Year 10: $1,000

Naturally, if you reduce the holding period but keep the 10x outcome the same, the annual rate of return increases. For example, achieving a 10x return in 7 years results in a 39% annual return, and a 10x return in 5 years results in a 58.5% annual return.

When thinking about the 10x rule, I like to consider the holding period too so I can calculate the compound annual growth rate (CAGR).