The 148x Disaster
My first financial model showed a 148x LTV/CAC ratio. The ex-VC reviewing it laughed: "Above 50x, I close the deck. It means you don't understand your business."
The 5 Calculation Mistakes
❌ Mistake #1: Overly Optimistic CAC
Blended CAC of $7? You forgot founder time cost. Realistic is $25-35 for content-driven SaaS.
Fix: Include ALL costs: time, tools, ads, content, sales salary.
❌ Mistake #2: Confusing CAC Paid vs Blended
CAC Blended = (% organic × organic CAC) + (% paid × paid CAC)
Fix: If 70% organic at $15 and 30% paid at $50 → Blended = $25.50
❌ Mistake #3: Unrealistic LTV (Churn Fantasy)
Using 1% churn when realistic is 3-5%. LTV with 1%: $2,900. LTV with 3%: $967. 3x difference!
Fix: Use 3% for B2B SMB, 5% for B2C as baseline.
❌ Mistake #4: Ignoring Payback Period
20x LTV/CAC is great, but if payback is 24 months, you're cash-dead before seeing it.
Fix: Always show payback period. Target: <12 months.
❌ Mistake #5: Not Showing Evolution
VCs want trajectory: M1 → M12 → M36. One number tells nothing.
Fix: Show CAC improving from $35 → $28 → $20 over time.
VC Benchmarks
| Metric | Acceptable | Excellent | Red Flag |
|---|---|---|---|
| LTV/CAC | 3-5x | 5-20x | >50x |
| Payback | 12-18mo | <6mo | >24mo |
| Gross Margin | 60-70% | >80% | <50% |
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