Investor question 17 of 50 · Unit economics & retention
“What's your CAC payback period?”
Short answer: the investor is really asking how much cash does growth tie up? Answer in three steps: (1) cAC / (monthly ARPA x gross margin); (2) compare with 12-18 months, a common rule of thumb; (3) show payback by channel.
What they're really asking
How much cash does growth tie up? Investors rarely care about the question on its own. They're testing whether you know your numbers cold, whether your assumptions are honest, and whether you can explain them simply.
How to answer, step by step
- CAC / (monthly ARPA x gross margin).
- Compare with 12-18 months, a common rule of thumb.
- Show payback by channel.
An example answer
About five months blended. Paid social is our slowest at about nine months.
Figures are from Loopdesk, the fictional SaaS company in our sample files. Swap in your own numbers and keep the structure.
The answer that loses trust
Avoid
Not knowing payback by channel.
Where the proof lives
Before the meeting, find the number behind your answer. In our workbooks it lives in: LTV & Payback, CAC by Channel. If you can open that tab and point to it, the follow-up question is easy.