How these connect
CAC and LTV are the unit. Rule of 40 and Burn Multiple are the system.
Unit economics splits into two layers. There's the per-customer math — what does it cost to acquire one customer and what are they worth? That's CAC, LTV, payback, and the ratio between them. And there's the company-level math — given how that unit math compounds, is the whole engine healthy? That's where Rule of 40, Magic Number, and Burn Multiple live.
CAC, CAC Payback, LTV, and LTV:CAC are a single conversation. You can't optimize one without affecting the others. Lower CAC by spending less on marketing and you'll likely see win rate drop, sales cycle stretch, and ACV shrink — which lengthens payback and lowers LTV. They move together. Track them together.
Magic Number and Burn Multiple ask the same fundamental question with different framing. Magic Number is the old-guard "is your sales and marketing engine paying back?" measure. Burn Multiple is the new-guard "is your entire company paying back per dollar of ARR added?" measure. Magic Number is operational. Burn Multiple is existential. Investors today ask about Burn Multiple first.
Rule of 40 is the synthesis. It captures the central tradeoff in SaaS — grow faster and burn more, or grow slower and operate profitably. Either path can clear 40. The companies that don't clear 40 are choosing both — slow growth and heavy burn — which is the worst combination on the board deck.
Burn Rate, Runway, and Quick Ratio are the survival metrics. Everything else can be theoretically healthy and you still go out of business if cash runs out. Runway under 12 months changes how you should read every other metric in this category. Under 6 months, none of the others matter.