A Smart Bear: Startups and Marketing for Geeks

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Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

In terms of acquisition, they ask more specifically: “How can we trade balance sheet assets (cash, equity) in exchange for executing our strategy better?”. So this acquisition is worth more than $20m in revenue, which at the average revenue-multiple for public tech companies , yields $100m in market value.

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Visualizing the Interactions Between CAC, Churn and LTV

A Smart Bear: Startups and Marketing for Geeks

But it’s surprising to me how many companies with recurring/subscription revenue don’t understand the interactions between the elements that make up customer acquisition cost (CAC), churn and lifetime value (LTV). The black horizontal line represents time and the unlabeled vertical access represents relative profit.