CAC Payback
Definition
The number of months a company takes to recover its customer acquisition cost from gross profit on the cohort acquired. Calculated as CAC ÷ (monthly gross profit per customer). A CAC payback under 18 months is the typical institutional threshold for treating customer-acquisition spend as investment rather than expense — the cohort retention data supports CAC-amortisation reclassification under management accounting. In SaaS and consumer-subscription businesses where cohort retention is well-documented, CAC payback is the cleanest reclassification candidate among the four most-adjusted opex categories (R&D, brand-build, CAC, software development), because the cohort evidence is unambiguous. Statutory accounts force it through opex; capitalisation-reclassified EBITDA recognises it as a 12–24-month-amortised customer-relationship asset.
Complementary Terms
Concepts that frequently appear alongside CAC Payback in practice.
An intangible investment — R&D, brand-build, customer-acquisition with proven payback, software development — that has been moved from operating expense to balance-sheet asset and amortised over its useful life under management accounting. Statutory accounting rarely permits the same treatment for internally-generated intangibles: IAS 38 imposes six conservatism criteria that are difficult to meet in practice; ASC 730 forces immediate expensing under US GAAP.
An analytical framework that decomposes economic or firm-level output growth into contributions from labour, capital, and a residual factor often interpreted as technological progress or total factor productivity. Growth accounting is fundamental to understanding how intangible investments — in R&D, software, organisational design, and human capital — drive productivity improvements.
A reconciliation document that maps founder-reported EBITDA to a Fund's maintainable EBITDA, identifying each adjustment per IPEV Section 3.4 with documented evidence. The bridge typically traces non-recurring spend, discontinued lines, one-time items, founder compensation normalisation, and pro-forma adjustments — each with source documentation (board minutes, contracts, payroll) and the known-and-knowable evidence flag.
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