The $10M Ask on 1.2:1 Unit Economics
The deck says 'raise $10M, pour it into growth.' The unit economics say the growth loses money. You're the last read before the partner meeting.
Your friend Marco runs Fieldbook, a B2B SaaS for landscaping companies ($89/month average). He's pitching a $10M Series A next week and sends you the deck for a final gut-check. The growth slide is real: MRR grew from $18k to $74k in twelve months. The plan slide says: "Use of funds: 70% to sales & marketing — we've proven the machine, now we feed it."
Then you reach the appendix:
| Metric | Value | | --- | --- | | MRR | $74,000 | | Blended CAC | $2,900 | | Average revenue per account | $89/mo | | Gross margin | 71% | | Monthly logo churn | 3.8% | | Implied customer lifetime | ~26 months | | LTV (gross-margin adjusted) | ~$1,640 | | LTV:CAC | ~0.57 | | CAC payback | ~46 months | | Monthly burn | $95,000 | | Cash remaining | $640,000 |
Marco's own slide claims "LTV:CAC of 3.1" — but that version uses revenue instead of gross profit, assumes churn will halve, and quietly excludes the two sales hires from CAC. He has under seven months of runway. He asks: "Be honest — is the story fundable? Anything I should fix in the deck?"
Data snapshot
Write your honest read to Marco. Is 'pour $10M into sales & marketing' a fundable story as-is? Diagnose the unit economics using the appendix numbers, explain the specific problem with the deck's LTV:CAC claim, and lay out what you'd change — in the business and in the raise strategy — given his seven months of runway.
Rubric
- Unit economics diagnosis. Correctly reads the appendix: each customer costs ~$2,900 and returns ~$1,640 of gross profit, so growth spend destroys value; payback (~46 mo) exceeds lifetime (~26 mo).
- Calls out the LTV:CAC inflation. Explains specifically why the deck's 3.1 figure is wrong: revenue instead of gross profit, assumed (not achieved) churn improvement, and excluded sales-hire costs.
- Fix the machine before feeding it. Argues the use-of-funds must change: fix churn/pricing/segment focus before scaling S&M, with at least one concrete lever (e.g. price increase, annual plans, narrower ICP, onboarding to cut early churn).
- Runway-aware raise strategy. Addresses the 6.7-month clock realistically — e.g. raise a smaller bridge, cut burn, or reframe the round around fixing retention economics — rather than pretending time is unlimited.
- Investor's-eye honesty. Anticipates that any diligent Series A partner will recompute these numbers, so the inflated slide is not just wrong but a credibility risk.