Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period. A company spending $500K on marketing acquiring 100 customers has a $5,000 CAC. CAC varies by channel (paid ads, content, sales-led, partnerships) and customer segment (enterprise vs. SMB). The LTV/CAC ratio is the key venture metric: 3:1 healthy, 5:1+ excellent, under 1:1 broken business model. CAC payback period (months to recover CAC from gross profit) typically under 12 months for SaaS. Reducing CAC through better targeting, conversion optimization, or organic channels is the perpetual SaaS growth challenge.
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ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
CAC
August 22, 2026 · Aditya Gupta
Corporate Finance
Related terms
ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Multiple
Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
