LTV:CAC ratio
Lifetime value divided by acquisition cost — a quick read on whether your growth engine is profitable.
3:1 is the rule-of-thumb target; much higher can mean you're under-investing in growth, much lower means you're buying unprofitable customers.
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Get the real-world version of "LTV:CAC ratio" drawn from hundreds of conversations with founders and investors.
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CAC
The fully-loaded cost of acquiring one customer — sales and marketing spend divided by new customers won.
LTV
The total gross profit you expect from a customer across their whole relationship with you.
Payback period
How many months of a customer's gross profit it takes to earn back what you spent acquiring them.
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