From the link above, how did they calculate the 7.8M CAC with a 12 month payback period? I assume it is based on the data below, but how did the number end up to 7.8M:
"Let’s take a hypothetical example of a SaaS company at $625k in ARR, growing at 15% per month. The company has 25 customers each paying $25,000 and operates with an 80% gross margin. The company bills monthly."
When I looked at his example more closely, the numbers didn't make sense to me either.
I always assumed he had calculated them correctly, but looks like his projection of $2.7MM ARR in 12 months might be a typo ($625k starting ARR with 15% annual growth is $3.3M, his figure is 20% less. Maybe he accidentally calculated Gross Margin run rate).
Here's a similar example illustrating the difference between 12 month and 6 month payback at different growth rates. The cells highlighted in yellow are inputs, so you can change the numbers and see how the capital requirements will change for the year.
"Let’s take a hypothetical example of a SaaS company at $625k in ARR, growing at 15% per month. The company has 25 customers each paying $25,000 and operates with an 80% gross margin. The company bills monthly."