LTV / CAC
Abbreviation · Startup & VC
Definitions
Lifetime Value / Customer Acquisition Cost — the ratio of how much revenue a customer generates over their lifetime to how much it costs to acquire them. The health check of any subscription business. LTV/CAC > 3 is the benchmark.
In plain English: Comparing how much money a customer brings in over time versus how much you spent to get them — if you spend more getting customers than they pay you, your business is underwater.