Almost every first meeting with an investor in SaaS lands on the same conversation: *"What's your CAC? What's your LTV?"* Both metrics are useful in mature companies and almost useless in early-stage ones.

## what each one is

- **CAC (Customer Acquisition Cost).** What you spent on marketing and sales divided by how many new customers you brought in. The problem is that it floats in a vacuum — it doesn't mean anything without something to compare it to.

- **LTV (Lifetime Value).** What an average customer will leave with you over their lifetime. In early stage you're *guessing*. You don't have the historical record to extrapolate. Any number you plug in is the founder marketing themselves to the investor.

- **Payback period.** CAC divided by the monthly revenue (or monthly margin) of one customer. How many months it takes that customer to pay back what they cost to acquire.

## why payback period wins

It's **observable** (not projected), **simple** (one number), and **actionable** (it tells you to slow down, hold steady, or accelerate).

Three ranges guide the strategy:

- **Under 6 months.** You're being conservative. You should probably accelerate spending on acquisition — the flywheel will get better on its own.
- **Between 6 and 12 months.** Healthy equilibrium for sustained scaling. Most successful B2B SaaS lives here.
- **Over 12 months.** Red flag. Either there's a churn problem, or you're paying too much for acquisition, or both.

## the detail people forget

As you scale, payback period **gets worse, naturally**. The first customers are the easiest. The next ones are progressively more expensive. It's not a sign that something broke — it's the predictable cost of growth. What matters is that it doesn't run away.

## conclusion

Drop the CAC/LTV noise. Look at payback period. It's an honest metric you can't fake on a deck.