The economics of most Internet startups are sort of the same. You invest CAC (customer acquisition cost per user), you convert the free user to a paying user (conversion rate), and you hope she sticks around long enough (churn rate) to get a decent LTV (customer life time value). With a decent growth rate, you have a good business.

Seasoned venture capitalists are tempted to dive straight into these figures and skip the bit what your business is all about. I would encourage you not to give in. It is important to establish that emotional connection with the problem you are trying to solve, how great your product is.

In the end, they will be investing in a business that consists of people and users, not just a spreadsheet that delivers LTV-CAC.


Art: Jean Honore Fragonard, The Love Letter, 1770.