LTV to CAC ratio and payback calculator
two numbers decide whether you can afford to grow. the ratio tells you if a user is worth more than they cost. payback tells you how long your cash is tied up before you get it back. a good ratio with a terrible payback still kills you, because you run out of money before the maths pays off.
this calculator needs javascript. the explanation below works without it.
What good looks like
the widely used rule of thumb is 3 to 1. below 1 you are paying more than a user is worth. between 1 and 3 the business works on paper but has no margin for a bad month.
a very high ratio is not automatically good news. if you are at 8 to 1, you are probably being too cautious with spend and someone else is buying the users you could have had.
Why payback usually matters more at seed
ratio is about whether the business works eventually. payback is about whether you survive until then. if it takes 14 months to earn back a user and you have 10 months of runway, the ratio is irrelevant.
under 12 months is the usual comfort line, and under 6 lets you reinvest revenue into more growth rather than waiting on the next raise.
Numbers tell you what. They do not tell you what to do.
bring your real numbers to the breakdown call and leave with a plan for them. free, no pitch deck.
Common questions
My ratio is great but I am running out of money. How?
almost always payback. a user worth $90 over two years who costs $30 today is a good deal and a cash flow problem at the same time. you pay now and collect slowly, so faster growth makes the cash gap wider, not smaller.
Does this work for a free app with ads?
yes, if you convert ad revenue into a monthly revenue per user figure first. the maths does not care where the money comes from, only that it arrives monthly and you keep some of it.
Other plan tools
CAC calculator
free CAC calculator. put in your ad spend and new users, get paid CAC and blended CAC. no signup, no email.
PlanLTV calculator
free lifetime value calculator. put in price, margin and churn, get LTV and how long an average user stays. no signup.
PlanBreak-even CAC
work out the most you can afford to pay for a user before you lose money, and the target CAC that leaves healthy margin.
PlanRunway and burn
free runway calculator. cash, burn, revenue and planned hires in, months of runway out, with and without the hires.
Bring one real growth problem. Leave with the fix.
the breakdown call is free. no pitch deck, no agency handoff.