Answer
What LTV:CAC ratio should I target?
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- Question
- What LTV:CAC ratio should I target?
- Direct answer
- Target LTV:CAC of 3:1 minimum, 5:1 for healthy unit economics. Above 7:1 usually means you should invest more in acquisition – you're under-spending and leaving growth on the table. Below 3:1 means the business is unprofitable per customer.
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- metrics
- Last verified
- May 19, 2026
Direct answer
Direct answer
As of , the answer is: Target LTV:CAC of 3:1 minimum, 5:1 for healthy unit economics. Above 7:1 usually means you should invest more in acquisition – you're under-spending and leaving growth on the table. Below 3:1 means the business is unprofitable per customer.
People also ask
What LTV:CAC ratio should I target?
Target LTV:CAC of 3:1 minimum, 5:1 for healthy unit economics. Above 7:1 usually means you should invest more in acquisition – you're under-spending and leaving growth on the table. Below 3:1 means the business is unprofitable per customer.
What's the nuance?
LTV calculation should be cohort-based, not '1/churn'. Real churn curves are non-linear.
What else should I know?
CAC should include founder time, not just paid ad spend. Indie SaaS often under-counts CAC.
What's the common mistake here?
Payback period under 12 months is healthy; under 6 months is excellent; over 18 months means funding acquisition out of capital, not cash flow.
Supporting points
- LTV calculation should be cohort-based, not '1/churn'. Real churn curves are non-linear.
- CAC should include founder time, not just paid ad spend. Indie SaaS often under-counts CAC.
- Payback period under 12 months is healthy; under 6 months is excellent; over 18 months means funding acquisition out of capital, not cash flow.
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