Startup & VC Jargon · Managing Director level

"LTV:CAC"

"LTV:CAC" is a ratio comparing how much revenue a customer generates over their lifetime to how much it cost to acquire them, used to assess whether a business model is financially healthy.

Say this instead: customer value vs. cost to win

How "LTV:CAC" shows up at work

Every investor deck has it; almost no two decks calculate it the same way. LTV can be a trailing average, a cohort projection, or a number someone worked backward from to hit 3:1. The ratio is real and important; the confidence around it usually is not.

Buzzword

Our LTV:CAC is sitting at 3.2, which gives us room to scale paid acquisition.

Plain English

Our customer value vs. cost to win is 3.2, so we have room to spend more on acquisition.

Corporate Rank: Managing Director · Category: Startup & VC Jargon

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