Investor Economics
Also known as: Unit Economics, Return on Investment, Fundability
H-BMC Block 15 — the gross margin, unit economics, capital requirements, and return potential of the business model.
Full Definition
Investor Economics synthesizes the H-BMC into the metrics investors and program funders use to evaluate fundability: gross margin, contribution margin, customer acquisition cost (CAC), lifetime value (LTV), LTV:CAC ratio, capital required to reach profitability, and projected return multiple. It is the final block in the canvas because it is derived from all upstream assumptions. Weak upstream blocks produce unreliable Investor Economics regardless of how carefully the calculations are done.
Example
A SaMD company's Investor Economics: 82% gross margin, CAC of $85K (18-month enterprise sales cycle), average contract value of $180K/year, 3-year LTV of $540K, LTV:CAC ratio of 6.4x, $12M required to reach cash flow breakeven at 40 health system customers.