LTV (Customer Lifetime Value)

Intermediate 🚀 Startup / VC

Definition

The total profit a customer generates for your company over their entire relationship—essentially predicting whether they'll be worth the investment to acquire.

Example Usage

We calculated our LTV at $8000 by multiplying average customer lifespan (3 years) by annual profit per customer ($2700).

Origin

Marketing and accounting term from the 2000s, became central to SaaS metrics.

Fun Fact

LTV calculations often double or triple during enterprise deals, making those sales disproportionately valuable.

Source: SaaS and business metrics terminology

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LTV

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pre-money valuation

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