Months to Recover CAC
Months to recover CAC tells you how long it takes a new customer's payments to repay what you spent to acquire them. You divide your customer acquisition cost by the monthly recurring revenue each customer brings, ideally adjusted for gross margin so you count only the money you actually keep. A result of 12 means a customer pays back their acquisition cost in a year, after which they turn profitable.
This is the timing twin of the LTV to CAC ratio: that ratio tells you if acquisition is profitable, while this tells you how fast. For a lean or bootstrapped founder, speed is survival. A 6-month payback lets you reinvest quickly and grow off your own cash; a 24-month payback ties up money you may not have and makes every acquisition a long bet on the customer staying. Shortening payback, through higher prices, upfront annual billing, or cheaper acquisition, frees cash to grow without raising outside money.