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WELCOME TO ISSUE NO #02

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📆 Today’s Rundown

Happy Saturday! This week I’ve compiled some amazing resources that will definitely impress you.

Let’s break it down in this week’s issue.

• ⌚ CLV: Customer life time value

• 🧐 1, 2 or 3: Bootstrapping vs. Angel Investor vs. Fundraising

• 📊 Excel: XLOOKUP vs. VLOOKUP

• The FP&A and BI Guide Easter sale is now on. As the Finance Startup subscriber you can save an additional 40% off the regular price. Details below.

• I’ve partnered with Wall Street Prep and Wharton Online to bring you an incredible opportunity to save hundreds of dollars and build your FP&A career. Check out this a one-of-a-kind, theory-meets-practice, FP&A certificate program. Details below.

• My friend Bojan Radojicic launched a value-packed Financial Modeling Course and his students are loving it. I’ve also secured an exclusive 50% off coupon just for the Startup Finance subscribers, so if you’re looking to elevate your career, check it out below.

• I’d love to get your thoughts on this week’s poll. Share your thoughts below!

👇️ Watch: Learn 71 Excel Shortcuts in less than 15 minutes by Josh

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Customer life time value

And this springs' hottest remix - LTV to CAC

The Dive

Imagine if you could predict exactly how much cash you'll pocket from a customer before they say goodbye. That's what Customer Lifetime Value (LTV) is all about. It's like peering into a crystal ball and seeing,

The Math

The Nitty-Gritty

Let’s look at each component:

• Average Annual Revenue per Account: This one's straightforward. It's the yearly cash flow from a customer. Subscription-based businesses have it easy here since they can expect a steady stream of income. For others, like a café or a boutique, it's a bit trickier to nail down an average, but it's still doable.

• Average Account Churn Rate: Think of this as the flip side of how often customers stick around. It's easier to calculate for subscription services since you'll know when a customer bids farewell. And remember, we're talking about accounts here, not dollars. Why? Because your big fish might be balancing out the smaller ones.

• Cost of Goods Sold (COGS): This covers all the expenses to keep your customer happy and engaged. Think hosting, support, and customer success. It's a reminder that even after landing a customer, there are still costs to keep them on board. And yes, I just made up a fishing analogy for this – not my finest moment!

Now, how do you know if your LTV is in the sweet spot? A good rule of thumb is to aim for an LTV that's 3x to 5x your Customer Acquisition Cost (CAC). This ratio, called LTV to CAC, is a key indicator of whether you're on the right track or just burning cash.

If you want a refresher on CAC, check out this amazing piece here.

Can LTV to CAC Be too High?

Controversial take alert: Yes, it can.

If your LTV to CAC ratio is sky-high, it might mean you're playing it too safe. You could be missing out on growth opportunities by not investing enough in sales and marketing. Remember, in the business world, growth often drives valuation. So, by not chasing new customers aggressively, you might be giving your competitors an easy ride and potentially limiting your company's value.

In summary, LTV is a powerful metric that can guide your strategies and investment decisions. Keep an eye on it, tweak your approach as needed, and watch your business thrive!

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XLOOKUP vs. VLOOKUP

If you're anything like me, Excel is practically your second home. And today, I want to talk about a game-changer in the Excel world: the XLOOKUP function. I used to be a die-hard fan of VLOOKUP, but not anymore. Let's dive into why.

XLOOKUP: The New Kid on the Block

XLOOKUP is like having a superpower in Excel. It lets you search through a range of data and grab values based on specific criteria. Here's a quick breakdown of its syntax:

• LOOKUP_VALUE: The value you're searching for.

• LOOKUP_ARRAY: The range containing the data, including where the lookup value is located.

• RETURN_ARRAY: The range from which to retrieve the value.

• IF_NOT_FOUND: Optional. Specifies what to do if no match is found.

• MATCH_MODE: Optional. Specifies the match mode for the lookup.

• SEARCH_MODE: Optional. Determines the search direction.

Why XLOOKUP Rocks:

• It can look left, right, up, or down in your data.

• You only need the 3 required arguments to make it work.

• It uses arrays, so if data is added, XLOOKUP still works.

• It can handle errors without needing IFERROR.

• It can return an array, not just a single value.

• It supports wildcards and reverse searches.

VLOOKUP: The Old Faithful

VLOOKUP has been a staple for Excel users for years. It's great for looking up precise values. Here's a quick syntax breakdown:

• LOOKUP_VALUE: The value you're searching for in the first column of the table.

• TABLE_ARRAY: The range of cells containing the data.

• COL_INDEX_NUM: The column number in the table from which to retrieve the value.

• RANGE_LOOKUP: Optional. TRUE for an approximate match or FALSE for an exact match.

Why You Might Still Use VLOOKUP:

• It's perfect for pulling in an exact value when you don't need to sum values in a range.

The Verdict:

While VLOOKUP is still useful, XLOOKUP has definitely stolen the spotlight for me. It's flexible, powerful, and just makes life in Excel so much easier.

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