If you are building something worth pronouncing – something more than just a hobby with a login screen – you need to know your numbers. No, “I will return to you”, you know them. I mean to know them as if you know the request of the co -founder’s coffee.
I have worked within innovation teams in one of the largest financial institutions in the world. I have seen many founders – Smart, legitimate, ambitious – by investors just because they were unable to walk in their units economies.
She is not a character. It is mathematics.
So here:
10 numbers will carry your stadium or kill it quietly – as with a real person, with examples, and zero bs.
The burning rate
How quickly is your money lighting on the fire ???
If you spend $ 80,000 a month to keep the lights (salary statements, AWS, your work space), and you got $ 400,000 in the bank … this is 5 months of oxygen. Not 6. No “depends.” five. This is if you do not employ your cousin as the head of the product strategy.
The real conversation: Investors want to know when the plane runs out of fuel – before running.
CAC (Customer acquisition cost)
How much does it cost to persuade someone to pay you ???
10,000 dollars spend on ads, content and cold communication. This brings you 100 users who pay. Your CAC = $ 100. great!!!
Ask now:
Do you sell a product for $ 20 once? Or 100 dollars per month? Because if CAC is higher than LTV, you do not build a job – you are sponsoring users. Normal and simple.
LTV (client’s life value)
How much the customer deserves over time ???
Suppose you receive $ 25 monthly. The normal ordinary customer is about 12 months.
LTV = $ 300.
If your CAC is $ 80? You are in green.
If it is $ 350? You mainly pay people to hang out.
The thumb base:
You want your LTV to be at least 3x CAC. Otherwise, mathematics stop working on a large scale. Based on my experience, you are more attractive if you are closer to 5X if you ask me.
Total margin
What do you already keep after providing your service or product ???
If you sell a subscription for $ 50 per month and cost you $ 10 per month to host, maintain and support, your total Hams is 80 %.
Good: Saas companies often reach 70-90 %.
Bad: If you are less than 30 %, your “developmental” work will collapse underwear.
Running
How long before the criticism is depleted ???
The same mathematics as the burning rate. You have $ 250,000 in the bank. Spending 50 thousand dollars per month.
You have 5 months. This is your runway.
Investors ask: He answers the simple question, “If we do not finance you, how long will you survive?” If you do not know this answer, you are not collecting donations – you are independent with hope.
Mrr / arr
Repeated monthly / annual revenues = expected income.
If you are withdrawing $ 20,000 per month with subscriptions, this is $ 240,000. basic.
What investors care about:
Is this number growing?
Is it pumpkin resistant?
Do you rely on one or two large contracts that can walk?
The rate of chaos
How quickly users leave users – and we must be worried ???
You had 500 users at the beginning of the month. It lost 50.
This is 10 % chewing.
This is high.
Parting the annual character and … OCH. You do not grow. You are replacing.
Fix it before collecting donations. Or at least explain the reason for the height of Churn and what you do to connect the holes.
Recover period
How long before you restore your CAC ???
Let’s say that your CAC is $ 250. And your client pays $ 50 per month.
It takes 5 months to break even.
Health domain: 3-6 months.
Long than that? You need serious retention – or a bank account that can handle waiting.
Ebitda
The profits before interest, taxes, depreciation and firefighting.
It is not amazing. It is not fun. But he tells the adult investors: “Here is what we really make by wiping the accounting fog.”
If it is negative, this is a good thing-the stage is often. Just do not act amazed when someone puts it out. You should have done these mathematics before the stadium.
Evaluation (Trust me: not just feeling, logic and facts)
What deserves your company – and what supports this number?
If you have already entered and say $ 30 million because a friend raised in it, please stop.
Evaluation = traction + market companies + revenue + momentum + team.
Flasting numbers make investors work.
They do not correct you – they just get you.
A real talk before it closed this tab
I met this founder once – raw days, but you can say he really cares. He was not trying to look impressive. No toning words. No talking “disturbance”. Just someone trying to fix something annoying and important.
He walked to the room with a spark. Do not boast – only that quiet density.
We were tending.
Then, in the middle of the field, someone asks,
“So what is your monthly burning?”
He said, and I do not bother you,
“Mother … I think the founding of the participant has it. I haven’t seen recently.”
This was.
No collapse.
There is no embarrassing silence.
Just … a click. Like a closing window in the background.
The product? It is still smart.
But the moment? gold.
No one was angry. No one laughs. So we thank him.
But no one continues.
Why? Because she did not feel like work.
I felt like it was.
I have seen a lot of versions of this scene itself.
It is never a matter of charisma. It is not about the idea, half the time.
It comes to whether the person who is asking for money is actually known what they build. Not a dream – mechanics. Courage. The ugly mathematics does not boast about Twitter.
You don’t have to be perfect.
You just have to be in it. Open eyes. Numbers in your head.
Because if you are asking people to believe in what you adopt, it is best to believe in the scaffolding you hold.
So yes, get to know your CAC. Your LTV. Your hamsa. Chew you.
Not specifying a box on the investor sheet.
To prove yourself that the thing you spend in your life … has legs.
It can stand.
And run.
Perhaps, one day, it surpasses you.
None of the deck will do this part for you.
No co -founder of the participant can answer these questions on your behalf forever.
If your vision – possess mathematics.
If your company – learn the cost of keeping it alive.
These are the financing companies made of.
The rest? Smochs, underwent lines, plan to “go to the market”? …. all this is just a package.
It is fashionable to be useful and useful for all the founders of trying to build the next big thing. While there are many proportions and concepts, this is its essence.
I hope this gives you a perspective of being on the other side, evaluating your hard work and passion, and puts you for success in reviewing the next investor.
I look forward to your thoughts, comments and reactions. If this was useful, attractive and rich in information, then sharing and Subscribe. You never know who you may need, or can benefit from it.
Until then, continue to learn unwanted and re -learn people.
