Pitch Deck Metrics Calculator

Three ratios do most of the work in an early-stage software pitch, and they are computed together here because each answers a different question. LTV divided by CAC tests whether a customer is worth more than it costs to win: 3x or better is the conventional threshold, below 1x means the business loses money on every sale, and far above 5x usually indicates underinvestment in growth rather than excellence. Burn multiple, net burn divided by net new ARR, tests capital efficiency: under 1.0 is exceptional, 1.0 to 1.5 good, 1.5 to 2.0 acceptable, above 2.0 hard to defend. The Rule of 40, growth rate plus margin, tests the balance between the two. The supporting inputs carry their own expectations. Software gross margin is normally 70 to 85 percent, and CAC payback measured on gross profit rather than revenue is expected under twelve months for SMB products and under eighteen for enterprise. These metrics are only as good as their definitions, which is where most pitch decks go wrong. CAC must include fully loaded sales and marketing cost, meaning salaries, commissions, tooling and events, not just advertising spend. An LTV computed from an optimistic churn assumption on a young customer base is close to meaningless, because it extrapolates a customer lifetime nobody has yet observed. And blended figures conceal segment differences, so investors normally ask for CAC and payback broken out by acquisition channel and customer size before taking any of the three ratios at face value.

Each of these ratios arrived from a different direction. Lifetime value originated in direct-mail and catalogue marketing, where practitioners were valuing a customer relationship across repeated purchases well before software adopted the idea. The surrounding recency-frequency-monetary analysis and the customer equity literature of the 1990s, associated with researchers including Robert Blattberg and with Frederick Reichheld's work on retention economics, supplied the framing that subscription businesses inherited more or less intact. The translation into SaaS conventions was largely the work of practitioner writing rather than academic publication. David Skok's essays on SaaS metrics, published on the For Entrepreneurs site from around 2011, popularised the specific 3x LTV to CAC guideline and the twelve-month CAC payback rule that pitch decks still quote today. The Rule of 40 entered circulation through Brad Feld's 2015 post of that name. The burn multiple is the most recent of the three, set out by David Sacks of Craft Ventures in 2020 as a deliberately simple test of how much cash a company consumes per dollar of new recurring revenue. Its rapid adoption after the 2022 funding correction reflected a shift in investor attention from growth rate toward the cost of achieving it.