User acquisition

Definition

The process and cost of getting new users/customers. It's usually the most expensive thing a startup does and also the most important.

Example Usage

Our CAC is $50 and LTV is $500, so we can spend up to $50 on user acquisition and still be profitable eventually.

Origin

Marketing terminology adapted for SaaS and internet businesses.

Fun Fact

For consumer startups, CAC payback periods (how long until a user pays for their acquisition cost) of 3-6 months are considered healthy.

Source: Marketing and SaaS business terminology

Related Terms

Beginner

GP

General Partner, the VC fund managers who make investment decisions and carry legal liability for the fund's operations. They're the ones whose names are on the door and whose reputations are on the line.

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niche-down

The process of narrowing your target market to a smaller, more specific segment rather than trying to serve everyone. What pivoting looks like when you finally accept your TAM assumptions were delusional.

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Ramen Profitable

The stage at which a startup makes just enough revenue to cover the founders' basic living expenses, assuming those expenses are limited to instant noodles and shared housing. It's the lowest bar of financial success that still technically counts as success.

🚀 Startup / VC

Intermediate

Moonshot

An ambitious, seemingly impossible project that aims to solve a massive problem, named after the Apollo missions because both require billions of dollars and a willingness to ignore the odds. For every actual moonshot, there are a thousand founders calling their food delivery app a moonshot.

🚀 Startup / VC

Beginner

Venture Capitalist (VC)

A professional investor who manages large funds and makes risky bets on startups—essentially a gambler with better PR.

🚀 Startup / VC

Intermediate

co-sale rights

Also called tag-along rights, these allow minority shareholders to join a sale transaction if majority holders are selling their shares. The 'if you're abandoning ship, I'm coming too' clause.

🚀 Startup / VC

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