A founder's guide to calculating CAC and LTV the right way
Companies, agencies, institutions, etc
LTV
CAC
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Summary
I’m a firm believer that greater data fluency not only unlocks potential for individual companies, but also an entire generation of founders from traditionally underrepresented backgrounds.Zooming in a bit further, there’s one metric that companies must get right in order to demonstrate their potential for growth and attract investors: their LTV/CAC ratio.Lifetime value (LTV) and customer acquisition cost (CAC) are two of the most common metrics used by investors and companies alike to provide a cost-benefit analysis and ultimately predict a company’s value.When companies acquire customers, the right way to view that customer is not just as a one-time purchaser but as a long-term cash-flowing asset.
As said here by Blair Silverberg