Show Me The Metrics!

The numbers that make investors say YES.

Author

Beth Chapman
February 12, 2025

If you’re raising money, forget about ‘brand love’ or social media vanity metrics. Investors care about one thing: proof that your business can scale profitably.

I’ve raised money before with a growing business at a time when capital was flowing. I’ve also been on the other side—running a business where every decision needed to protect the bottom line, because the river of investment had run completely dry. The biggest lesson I learned? If your unit economics don’t make sense early, no amount of marketing will fix it.

Growth at all costs is a dangerous game.
Smart investors look deeper.

They want to know:

  1. How much does it cost you to acquire a customer (CAC)?

  2. How much revenue and profit does that customer generate over their lifetime (LTV)?

  3. How long does it take to make that money back (Payback Period)?

If these numbers don’t stack up, you’re not building a business…you’re burning cash and hoping for a miracle.

The cold, hard truth about consumer brands

Consumer businesses, especially e-commerce, consume huge amounts of capital just to keep growing.

Spending £25 to acquire a customer might sound fine—until you break down the numbers. If your product sells for £50 and your gross margin is 50%, that means you only have £25 left after covering the cost of goods sold (COGS). If you’ve already spent £25 on acquiring that customer, you’ve broken even before even factoring in fulfilment, operations, team costs, and marketing overheads. In reality, you’re running at a loss unless that customer makes repeat purchases.

If that customer never buys again, you’re in trouble. Hold that thought.

Let’s for a moment talk about VAT vanity…

Sounds obvious, but a common mistake I see early stage founders make is including VAT in their numbers. Your revenue, margins, and CAC should always be calculated ex-VAT—otherwise, you're inflating your figures by 20% and setting yourself up for failure. VAT isn’t your money; it goes straight to HMRC. If you base your unit economics on gross figures, you’ll overestimate profitability, and make poor decisions about pricing, marketing spend, and cash flow.

Rather unhelpfully, Google and Meta report on gross numbers, so you have to manually take off 20% from your numbers.

Getting it wrong can completely throw off the financial reality of your business.

Okay, back to it.

If you’re thinking about starting a business, spend time upfront researching and fine-tuning your unit economics. Get your financial model nailed before you start—because once you're in the thick of it, it’s easy to get carried away chasing growth. If your numbers don’t work from day one, you’ll find yourself in a hole that’s almost impossible to climb out of.

If you’re scaling up and everything seems to be going well—you’ve just raised investment, and you’re pouring money into the marketing machine—pause for a moment. Revisit your unit economics. Take the time to analyse where optimisations can be made to ensure your business runs like a well-oiled, efficient machine. Every penny counts in D2C, and scaling profitably isn’t just about growth—it’s about commercial discipline and constant financial scrutiny.

If you don’t have one, get yourself a Fractional CFO. They will force you to scrutinise your business in a way that’s super uncomfortable, but absolutely essential for long term success.

Unit economics force you to challenge assumptions about pricing, retention, and growth. They might even stop you from launching a business that sounds cool but bleeds cash underneath.

What investors really care about

A solid marketing strategy isn’t just about pouring money into Meta or Google Ads. Investors want to see:

  1. Customer Acquisition Cost (CAC) vs. Lifetime Value (LTV) – A healthy LTV:CAC ratio of at least 3:1 is key. If you’re spending £1 to make £3, great. If it’s 1:1, you’re in a race against time.

  2. Payback Period – The shorter, the better. If it takes 12+ months to make back your CAC, you’ll need a huge cash buffer. Subscription businesses can get away with longer payback periods if they have predictable recurring revenue, but consumer brands need a faster return.

  3. Retention & Repeat Purchase Rate – A leaky bucket kills businesses. If customers don’t come back, your CAC keeps climbing, and profitability becomes a pipe dream.

  4. Marketing Efficiency Ratio (MER) – The total revenue generated per £1 spent on marketing. If you’re below 3:1, it’s time to rethink strategy.

Investors are asking: If we pour £10M into this, will it turn into £100M? If the answer isn’t obvious, you’re not VC-scalable.

Which leads me nicely to my next point…

Are you even VC scalable?

Not every business is built for venture capital, and that’s okay. VCs invest in companies that can scale exponentially, not just grow steadily.

Here’s what they look for:

  • Low marginal costs – The cost to acquire and serve new customers doesn’t rise significantly with scale.

  • Revenue that outpaces expenses – Software does this well. Physical products do not.

  • Network effects or defensibility – Your product gets stronger as more people use it.

A real-world example? Allbirds raised millions, had strong early traction, but their unit economics didn’t support aggressive VC-backed growth. Their marketing efficiency declined as they scaled, and ultimately, they went public while still unprofitable. Investors lost faith, and the stock collapsed.

Meanwhile, Gymshark bootstrapped their way to a multi-billion valuation by focusing on organic marketing, a loyal community, and strong retention. They didn’t need VC money to scale—because their unit economics worked from day one.

But, it’s not all doom and gloom for consumer brands…

Consumer brands can be VC-scalable, but timing and trends matter. If you can build a high-growth, capital-efficient model, investors will be interested.

Here are the early indicators that a consumer brand is VC scalable

  1. Low CAC with strong organic demand

    If 50%+ of your customers are coming from organic channels (word-of-mouth, SEO, referrals, community growth) rather than paid ads, you’ve got something special. Example: Oura Ring—initially grew through influencer buzz and organic content, keeping acquisition costs low while sales exploded.

  2. High repeat purchase rate or strong subscription model

    Investors love predictable revenue. If you have high retention, you don’t need to spend as much on acquisition, which improves margins. Example: Hims & Hers Health—a DTC brand selling wellness products with a strong subscription model, keeping LTV high.

  3. Premium pricing & high gross margins (60%+)

    If your gross margins are below 50%, it’s tough to justify VC money. The best VC-backed consumer brands have high-margin, premium pricing. Example: Liquid Death—took a low-margin product (water) and created a high-margin brand with premium pricing and cult status.

  4. Cultural momentum & brand loyalty

    If customers identify with your brand on a deep level, they’ll keep coming back and tell their friends. This reduces reliance on paid ads. Example: Glossier—built a cult-like following through content and community, driving organic demand.

  5. Massive total addressable market (TAM)

    Your brand needs to be playing in a category that can support billions in revenue, not just a niche. Example: Athleisure (Lululemon, Gymshark, Vuori)—big enough markets with repeatable purchases and high margins.

How to fix bad unit economics:

If your metrics aren’t stacking up, don’t panic. Tweak, refine, and get your business in a stronger position before scaling.

  • CAC too high? Test new acquisition channels before scaling paid spend.

  • Margins below 50%? Renegotiate supplier contracts or introduce premium pricing.

  • Retention low? Launch subscriptions, loyalty programs, or better post-purchase engagement.

Closing thoughts:

If you’re looking for investment, make sure you can answer these three questions confidently:

  1. How efficiently can you acquire and retain customers?

  2. What makes your brand defensible in a competitive market?

  3. Can you scale revenue without burning unsustainable amounts of cash?

Nail those, and you’ll be in a far stronger position—not just to raise money, but to build a business that lasts.

Here are a few high-quality resources on unit economics for consumer brands that will help you fine-tune your financial model and make smarter growth decisions.

Resources

Stay Bold, Stay Brilliant

Building a business is hard, but you don’t have to go it alone. Need help making bold moves? Let’s chat. Forward this to someone who needs a little inspiration, or drop me a line—I’m here to help.

Let’s make moves,
Beth

Disclaimer: I share advice from my own experience. Every business is unique, so tailor these ideas to fit your needs.