Essay · About a 15 minute read

The Art and Science of Figuring out Your CAC Payback Time

Christoph Janz · Point Nine (Point Nine Land) Free Intermediate

This is the essay that separates the two payback numbers that actually matter to you: the accounting payback (when the revenue equals the CAC on paper) and the cash payback (when the money is actually back in your bank). Janz walks through a B2B example where the accounting payback is roughly 12.5 months but the real cash payback stretches to about 15 once you factor in sales cycles and billing timing, which is exactly the gap that catches founders with a big upfront cost per customer. It also lays out the healthy thresholds from Bessemer and David Skok so you have a number to aim for, not just a formula.

  • Your cash payback is often longer than your on-paper payback once you account for how you bill and how long the sale takes, so model cash, not just revenue.
  • Common thresholds to anchor on: under 12 months is the classic rule, and Bessemer treats 12 to 18 months as good, better below that.
  • Payback tolerance shifts with your net revenue retention and stage, so borrow the benchmark but sanity-check it against your own churn.
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The question it answers

  1. My business has a big upfront cost per customer that pays back over months. How do I model CAC payback period so I don't run out of cash?

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