#969 · Startup Tool

Founder LTV Calculator

Estimate customer lifetime value, LTV:CAC ratio, maximum sustainable acquisition cost, and long-term customer profitability.

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Startup assumptions
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How to use this calculator

  • Enter ARPU, gross margin, monthly churn, and CAC.
  • Review LTV and LTV:CAC to assess unit economics.
  • Use the ratio to decide whether acquisition can scale profitably.

What the result means

The result estimates the gross-margin value of a customer over their expected lifetime. A stronger LTV:CAC ratio means better customer economics.

LTV = ARPU × gross margin ÷ monthly churn. LTV:CAC = LTV ÷ CAC.

Very low churn can produce very high LTV estimates. Use conservative churn assumptions for planning.

Example calculation

If ARPU is $100, gross margin is 80%, monthly churn is 4%, and CAC is $500, LTV is $2,000 and LTV:CAC is 4.0x.

Tips for better results

  • Improve retention before scaling paid acquisition.
  • Increase ARPU through packaging, usage tiers, or annual plans.
  • Use gross margin, not revenue alone, in LTV analysis.

FAQ

What is a good LTV to CAC ratio?

A healthy LTV:CAC ratio is often around 3x or higher, depending on stage and market.

How do SaaS companies calculate LTV?

SaaS companies often calculate LTV using ARPU, gross margin, and churn rate.

How can I increase customer lifetime value?

Increase lifetime value by reducing churn, improving expansion revenue, raising ARPU, and improving gross margin.

What LTV ratio do investors expect?

Investors often look for strong LTV:CAC together with fast payback and reliable retention.

Should churn be included in LTV calculations?

Churn should be included because customer lifetime is the core driver of LTV.

Startup decision modules

ModuleWhat it shows
Main ResultPrimary startup KPI for this calculator.
Health Score0–100 score based on founder-friendly thresholds.
Scenario SignalShows whether the current assumption is healthy, average, or risky.
RecommendationPractical next action for fundraising, growth, retention, or cost control.

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