What's a good LTV:CAC ratio, and when is my D2C brand actually profitable?
Compute LTV on contribution profit (not revenue), and the classic benchmark is a 3:1 LTV:CAC with CAC payback inside roughly 3-6 months; below ~1:1 you're paying to lose customers, far above 4-5:1 you're probably under-investing in growth. But ratios are a diagnostic, not the finish line: a D2C brand is genuinely profitable only when CM3 covers fixed costs (team, tech, overheads) - i.e. positive EBITDA - and repeat purchase is doing real work. In categories where people buy once a year, LTV is thin and you have to win on order one.
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4 resources, 1 India-specific, 4 link-checked.
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The canonical investor's-eye view of why LTV:CAC drives valuation, and why 3:1 became the rule of thumb. Read it to understand what a growth-stage investor is really testing when they poke at your unit economics.
The classic investor vocabulary for CAC, LTV, gross margin and the metrics that get misused in decks. Even though it's SaaS-flavoured, it's the shared language your investors speak, so it pays to know exactly what each term means and how it gets gamed.
A thorough operator guide that walks contribution margin, CAC, LTV and payback with benchmarks across DTC verticals - handy for setting expectations by category. Good breadth for founders who want the full glossary plus numbers in one place.
Sauce.vc writes first cheques into pre-revenue Indian consumer brands - this traces how their thesis evolved as they followed portfolio companies from zero revenue into genuine growth stage, a useful map of what an investor watches for at each step.
