LTV:CAC Health Check.
Three to one is healthy. Below that, you're acquiring customers who don't pay you back. Above five, you're under-investing in growth. Drop your numbers in.
Total MRR ÷ active customers. Use blended, not a single plan.
Revenue minus COGS (hosting, payment fees, support). SaaS: 70–85%.
% customers leaving each month. 1 ÷ churn = average lifetime.
Sales + marketing spend ÷ new customers won. Include salaries.
Inside the Bessemer 3:1-to-5:1 sweet spot. Hold the line on CAC and push retention to widen the gap.
How to read your number
LTV:CAC is the single ratio every B2B SaaS investor opens diligence with. The Bessemer benchmark is 3:1 — for every dollar you spend acquiring a customer, you should earn three dollars in gross profit over their lifetime. Below 3:1 the acquisition machine isn't funding itself. Above 5:1 you're leaving growth on the table — your CFO has room to push CAC up.
The version that matters uses gross-margin-included LTV, not raw revenue. ARPU × gross margin × average lifetime (1 ÷ monthly churn). Revenue-LTV inflates the ratio by 20–30% and is the most common way founders unintentionally lie to themselves about unit economics. We use the gross-margin version in this calculator because it's what investors will recompute when they get to the data room.
CAC payback is the same picture from a different angle. If the ratio is healthy but payback is over 24 months, you're running a working business that's starving for cash. Top-quartile SaaS pays back CAC in 5–7 months. The CAC Payback Calculator gives you that view standalone.
If your ratio is broken, the diagnosis is almost always one of three things: ARPU is too low for the channel (you're acquiring SMB customers with enterprise spend), churn is too high (the product doesn't stick), or CAC is bloated (you're bidding on terms that don't convert). Most accounts we audit have meaningful headroom in at least two of the three.
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