# Unit Economics Benchmarks

## Targets

SoVael Venture Studio targets a blended **22% portfolio IRR** over a 7-year horizon. Individual ventures are assessed against the benchmarks below.

| Metric | Year 3 | Year 5 |
|--------|--------|--------|
| Annual recurring revenue | £1M+ | £5M+ |
| Gross margin | >75% | >80% |
| Customer acquisition cost (CAC) payback | <12 months | <6 months |
| Lifetime value (LTV) / CAC ratio | >3x | >5x |
| Net revenue retention | >110% | >120% |
| Burn to validation | <£25K | — |

## Studio-Level Economics

- **Validation cost**: £10K-25K per 30-day sprint.
- **Build cost**: £25K-£75K to first paying customer.
- **Studio equity / revenue share**: 10-20% equity or 8-15% revenue share, depending on model.
- **Carried interest for finders**: 5% on opportunities that reach launch.

## Portfolio Math

| Year | Ventures Validated | Ventures Launched | Portfolio IRR (target) |
|------|--------------------|-------------------|------------------------|
| 1 | 12 | 2 | n/a |
| 2 | 24 | 6 | 5% |
| 3 | 36 | 12 | 14% |
| 5 | — | 25+ | 22% |

## Risk Rules

- No single venture may consume >30% of the annual studio budget without board approval.
- Ventures that do not reach 10 paying customers within 90 days of launch are reassigned or wound down.

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*Source: SoVael internal financial model, benchmarked against UK venture-studio returns and SaaS metrics, June 2026.*