Customer Acquisition Cost is the number investors ask for in almost every first meeting with a consumer brand. Most founders give a number. Very few can explain how they got there.
The correct formula is simple: total marketing spend in a given period divided by the number of new customers acquired in the same period. Not total orders. Not total revenue. First-time purchasers only.
The mistake most founders make is calculating CAC from blended spend — mixing brand campaigns, influencer fees, and performance marketing into one number. The resulting figure is not your CAC. It is an average that hides what is actually happening in each channel.
Calculate CAC by channel. Your paid social CAC will be different from your quick commerce CAC which will be different from your organic CAC. Knowing which channel acquires customers cheaply and which acquires customers who repeat — that is the information investors are looking for.
The second mistake is forgetting to include the full cost of samples, agency fees, and content creation in the numerator. If you spent ₹50,000 on an influencer post and acquired 200 customers, that ₹250 per customer needs to appear somewhere in your CAC calculation.
Once you have your real CAC, divide it into your LTV. LTV is average order value multiplied by purchase frequency multiplied by gross margin percentage. The ratio investors want to see is 3:1 minimum — for every rupee spent acquiring a customer, the business makes three rupees in gross profit from them over time.
If your LTV:CAC ratio is below 2:1, the acquisition model does not work at scale. Raising capital will not fix this. It will accelerate it.
Know your number. Know how you got there. That is the entire preparation.
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Eone Capital is a specialist fundraising advisory for Indian consumer-facing businesses raising ₹50 lakh to ₹20 crore from HNIs, family offices, angels, and institutional funds. The evaluation is free.