A 3:1 LTV:CAC ratio is the commonly cited healthy benchmark, and it's a reasonable sanity check — but it breaks down fast in practice. It assumes clean, accurate lifetime value estimates, which most early-stage companies don't actually have yet, and it ignores payback period entirely, so a business can hit 3:1 on paper while still running out of cash waiting years to recoup each customer.
Treat 3:1 as a rough gate, not a target to optimize toward — a business with a 5:1 ratio but an 18-month payback can be in worse shape than one at 3:1 with a 4-month payback.