LTV / CLV (Customer Lifetime Value)
The total revenue or profit a customer generates over their entire relationship with the company.
LTV estimates how much a customer is worth over their lifetime, factoring in average revenue, margin and retention. Compared against CAC (the LTV:CAC ratio), it shows whether a business model is healthy — investors typically look for a ratio of 3:1 or higher.
Examples
A customer paying £50/month for 24 months has a £1,200 LTV. — A 4:1 LTV:CAC ratio reassures investors about scalability.
How it relates to The Startup Foundry
A strong LTV:CAC ratio is exactly the kind of evidence the Investability Report rewards under Scalability.