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Venturelly

Free toolsUnit economics

LTV, CAC and payback on a subscription

Lifetime value on gross margin, not revenue; the ratio to acquisition cost; and how many months of gross profit it takes to get the acquisition cost back.

Revenue less the cost of serving that customer — hosting, support, payment fees.

Share of customers who leave each month. Lifetime value divides by this, so an optimistic figure here moves everything.

Everything spent to win one customer — advertising, sales salaries, commission.

LTV to CAC

3.4×

At or above the 3× investors treat as the floor.

Payback

9.2 months

Months of gross profit before a customer has repaid what it cost to win them.

Lifetime value
$2,169
ARPU × gross margin ÷ monthly churn. On margin, not on revenue.
Gross profit per customer per month
$69.42
Average customer lifetime
31.3 months
One over the monthly churn rate.
Monthly acquisition spend at this volume
$28,800
The cash the growth rate above actually costs, which is the part most plans leave out.
Gross margin used
78.0%

A ratio above 3× with a payback under twelve months is the shape investors look for, but neither is a rule. What they actually test is whether the churn rate is measured or hoped for — so say which, in the plan, where they will read it.

How this is computed

Subscription and membership businesses, and anyone being asked why their LTV:CAC is being disbelieved.

  • Lifetime value is ARPU × gross margin ÷ monthly churn. Computing it on revenue rather than margin is the most common way the figure gets inflated.
  • Payback is acquisition cost over monthly gross profit per customer — the months before the customer has repaid what it cost to win them.
  • The figures come from the product's own metrics module, run over a model built from these inputs.

What it will not tell you

A calculator that lists only what it does is a toy. These are the limits worth knowing before you quote the answer to anyone.

  • A churn rate taken from a few months of data is an estimate, and LTV divides by it — small errors there move the answer a long way.
  • Blended acquisition cost hides the difference between paid and organic. Investors will ask for both.

This number belongs in a document that agrees with it.

The full plan links every one of these together and blocks export until the prose and the model reconcile. Free to generate and read.

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