What is Unit Economics for Seed Startups?
Nexa Consultancy | Startup & Finance Glossary
At the seed stage, you may not be profitable, but you must prove you have profitable unit economics. This means showing that your Customer Lifetime Value (LTV) is significantly higher than your Customer Acquisition Cost (CAC).
Startup Example: A seed-stage D2C brand shows investors that while they are currently burning cash to grow, their LTV:CAC ratio is 3.5:1. This proves that as they scale, the business model will become profitable.
Analyzing unit economics is a key part of our Virtual CFO engagements.