How to think about your business model as part of a VC pitch

• COGS, or cost of goods sold, is the incremental cost for each unit you deliver. For software, this typically rounds to zero, but for hardware products or more service-driven businesses, the unit cost can be substantial.
• CAC, or customer acquisition cost, is the cost of sales and marketing divided by how many customers you’ve signed up.
• LTV, or lifetime value: How much is each customer worth, on average, once you sign them up?
• R&D cost is what it costs to develop the product. This isn’t usually included in the business model, but if the cost of R&D is astronomical and the cost-to-profit line never intersects, you could have a problem worth exploring.
• The pricing model isn’t usually part of the business model itself (it falls under LTV), but if you’re doing something unusual or creative with your pricing, it’s worth including that, either here or on your go-to-market slide.