BOSS: The Investor Room
Lesson 13 of 13 in our free Business Money Advanced guide: a 5-minute money game with the key points below.
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Questions you'll answer
SnackDrop's real EBITDA is minus £90,000. Dex reached plus £30,000 by adding back £80,000 of marketing (spent every year) and his own £40,000 salary. What's a fair EBITDA to use?
SnackDrop has £150,000 cash and a net burn of £25,000 a month. How many months of runway does it have without new money?
Dex wants £200,000 for 10% of SnackDrop. What post-money valuation is he claiming?
Final call. What's the investor-brain response to SnackDrop's pitch?
Quick facts
- Fact: “SnackDrop spends £80 to win a customer who brings in £40 of margin over their lifetime, so growing faster means bigger losses.” — LTV:CAC is 0.5. Each customer loses £40, so scaling multiplies the loss.
- Myth: “Dex: 'Revenue grew 300%, so the model works.'” — Revenue growth with negative unit economics is growth in losses.
- Myth: “Dex: 'Once we're bigger, the maths fixes itself.'” — Sometimes costs fall with scale, but that has to be shown, not assumed. Right now every customer loses money.