Why unit economics decide your fate
Growth funded by unprofitable units is a treadmill. Investors want to see that each customer, over time, makes you money.
The core metrics
- CAC: fully-loaded cost to acquire one customer
- LTV: gross profit a customer generates over their lifetime
- LTV:CAC: aim for 3:1 or better over time
- Payback period: months to recover CAC — under 12 is healthy for many models
- Contribution margin: revenue minus variable costs per unit
You don’t need perfect unit economics at seed — you need a credible path to them, with the levers identified.
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