Unit Economics First Principles

Most founders can recite a CAC and an LTV. Few can tell you whether the cost structure underneath those numbers is correctly classified and that gap is exactly where pitch meetings are lost and capital decisions go wrong. This article builds unit economics from the ground up: every cost type defined with precision, every formula derived with its assumptions stated, the difference between how product and services companies are evaluated, how VCs actually interrogate these metrics in diligence, and a fully worked example that shows the gap between the 12.7x LTV:CAC most founders report and the 6.8x a rigorous investor independently derives. If you work in venture, run a business, or sit in rooms where these numbers get presented then this is the framework worth having.

Link to the full article: Unit Economics First Principles PDF