Article

16 Startup Metrics

Andreessen Horowitz (a16z) · a16z.com Free Intermediate

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.

  • Precise definitions for CAC, LTV, gross margin and burn.
  • Common ways founders unintentionally misstate each metric.
  • The baseline vocabulary investors expect you to use correctly.
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The question it answers

  1. What's a good LTV:CAC ratio, and when is my D2C brand actually profitable?

Read with it

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  2. 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... a16z.com Article Why Do Investors Care So Much About LTV:CAC? Andreessen Horowitz (a16z)
  3. A thorough operator guide that walks contribution margin, CAC, LTV and payback with benchmarks across DTC verticals - handy for... topgrowthmarketing.com Article Unit Economics for DTC Brands: The Complete Guide Top Growth Marketing
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