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CODITECT Financial Model - Assumptions Registry

Overview​

This document catalogs all assumptions embedded in the CODITECT financial model. Each assumption is categorized by type, with current values, dependencies, and validation notes.

1. PRICING ASSUMPTIONS​

1.1 Base Pricing​

IDParameterValueRationale
P-01Individual Price$15/monthCompetitive with GitHub Copilot, Cursor
P-02Team Price$250/month~10 seats × $25/seat implied
P-03Enterprise Price$1,300/month~20 seats × $65/seat implied

1.2 Discount Structure​

IDParameterValueRationale
P-04Annual Discount20%Industry standard SaaS discount
P-05% Customers on Annual30%Conservative; enterprise skews higher

1.3 Pricing Risks​

  • Downside: Market commoditization could force 30-40% price cuts
  • Upside: Value-based pricing for enterprise could support 2x premium
  • Validation: Compare against Cursor Pro ($20), GitHub Copilot Business ($19)

2. GROWTH ASSUMPTIONS​

2.1 Customer Acquisition​

IDParameterValuePeriodNotes
G-01Starting Customers0Month 0Pre-launch
G-02Month 1 Customers10Month 1Beta users/founders network
G-03Early Growth Rate250%Months 1-3Viral PLG assumption
G-04Seed Growth Rate150%Months 4-6Post-angel marketing
G-05Scaling Growth Rate100%Months 7-10Channel maturity
G-06Maturing Growth Rate50%Months 11-15Market penetration
G-07Steady Growth Rate40%Months 16-21Sustainable growth
G-08Late Growth Rate30%Months 21-30Market saturation
G-09Mature Growth Rate25%Month 31+Long-term steady state

2.2 Growth Model Dependencies​

Customer[t+1] = Customer[t] × (1 + Growth Rate) - Churn
Net Growth = New Customers - Churned Customers

2.3 Growth Risks​

  • Downside: 50% slower growth if PLG doesn't work → 18-month cash crunch
  • Upside: Enterprise contracts could 2x growth rates
  • Validation: Compare against Linear, Notion early growth (100-200% MoM)

3. CUSTOMER MIX ASSUMPTIONS​

3.1 Segment Distribution​

IDParameterIndividualTeamEnterprise
M-01Month 1 Mix50%40%10%
M-02Month 12 Mix80%16%4%
M-03Month 24 Mix75%20%5%
M-04Month 36+ Mix70%VariableVariable

3.2 Mix Evolution Logic​

  • Individual grows fastest initially (PLG)
  • Team/Enterprise require sales motion
  • Mix stabilizes as enterprise sales mature

3.3 Mix Risks​

  • Downside: 90% individual = lower ARPU, higher churn
  • Upside: 30% enterprise = 3x ARPU, better retention

4. CHURN ASSUMPTIONS​

4.1 Initial Churn Rates​

IDTierMonthly ChurnImplied Retention
C-01Individual33.33%3 months
C-02Team16.67%6 months
C-03Enterprise10.00%10 months

4.2 Improved Churn (Month 24+)​

IDTierImproved ChurnImproved Retention
C-04Individual20.00%5 months
C-05Team12.50%8 months
C-06Enterprise10.00%10 months (no change)

4.3 Churn Assumptions Rationale​

  • Initial high churn reflects product-market fit discovery
  • Improvement assumes feature maturity, stickiness
  • Enterprise stability reflects contract obligations

4.4 Churn Risks​

  • Downside: 50% individual churn = negative unit economics
  • Upside: 10% individual churn = 10x LTV improvement

5. CUSTOMER ACQUISITION COST (CAC)​

5.1 CAC by Segment​

IDTierCACCAC/Price Ratio
CAC-01Individual$100.67x monthly
CAC-02Team$2000.80x monthly
CAC-03Enterprise$1,0000.77x monthly

5.2 CAC Assumptions​

  • Individual: Pure PLG, minimal paid acquisition
  • Team: Content marketing + freemium conversion
  • Enterprise: Outbound sales + account management

5.3 CAC Risks​

  • Downside: CAC inflation 2-3x in competitive market
  • Upside: Viral loops could reduce CAC 50%

6. UNIT ECONOMICS DERIVED​

6.1 Calculated Metrics​

MetricIndividualTeamEnterprise
LTV$45$1,500$13,000
LTV/CAC4.5x7.5x13.0x
Payback0.78 months0.94 months0.90 months

6.2 LTV Formula​

LTV = Price / Churn Rate
Individual: $15 / 0.333 = $45
Team: $250 / 0.167 = $1,500
Enterprise: $1,300 / 0.10 = $13,000

6.3 Blended Metrics (Month 12 Mix)​

Blended ARPU = (0.80 × $15) + (0.16 × $250) + (0.04 × $1,300) = $104
Blended LTV = (0.80 × $45) + (0.16 × $1,500) + (0.04 × $13,000) = $796

7. EXPENSE ASSUMPTIONS​

7.1 Headcount Plan​

IDPeriodHeadcountMonthly Burn
E-01Months 0-42$13,000
E-02Months 5-108 (+6 Month 5)$100,750
E-03Months 11-168$130,000
E-04Months 17-2813 (+5 Month 17)$211,250
E-05Month 29+18 (+5 Month 29)$292,500

7.2 Compensation​

IDParameterValue
E-06Initial Founder Salary$60,000/year
E-07Full Founder Salary$130,000/year (July 2026+)
E-08Average Employee Salary$150,000/year
E-09Benefits Multiplier1.30x (30% benefits load)
E-10Fully Loaded Cost$195,000/year

7.3 Variable Expenses (% of Revenue)​

IDCategory% of Revenue
E-11Marketing35%
E-12R&D (non-salary)3.75%
E-13G&A10%
E-14Cloud Storage5%

7.4 Fixed Expenses​

IDCategoryAmountScaling
E-15Office$1,000-$4,500/monthSteps with headcount
E-16Subscriptions$400-$1,200/monthSteps with headcount
E-17Other3% of revenueVariable

8. FUNDING ASSUMPTIONS​

8.1 Capital Structure​

IDRoundAmountMonthValuation Implied
F-01Initial$00N/A
F-02Angel$500,0002~$2.5M post
F-03Seed$10,000,0006~$40M post
Total$10,500,000

8.2 Use of Funds​

  • Months 1-6: Product development, initial GTM
  • Months 6-12: Scale engineering team, marketing
  • Month 12+: Cash flow positive, organic growth

9. OPERATIONAL ASSUMPTIONS​

9.1 Gross Margin​

IDParameterValue
O-01COGS Rate15% of revenue
O-02Gross Margin85%

9.2 COGS Components (Assumed)​

  • Infrastructure: ~8% of revenue
  • Third-party APIs: ~4% of revenue
  • Support: ~3% of revenue

9.3 Tax Assumptions​

IDParameterValue
O-03Effective Tax Rate26.5%
O-04Tax AppliedWhen EBITDA > 0
O-05NOL CarryforwardNot modeled

10. TIMING ASSUMPTIONS​

10.1 Key Dates​

IDMilestoneMonthDate
T-01Model Start0August 2025
T-02First Customer1September 2025
T-03Angel Close2October 2025
T-04Seed Close6February 2026
T-05EBITDA Positive13September 2026
T-06First Hire Wave5January 2026
T-07Second Hire Wave17January 2027
T-08Third Hire Wave29January 2028

11. ASSUMPTION SENSITIVITY MATRIX​

High Impact (Change Carefully)​

AssumptionImpactSensitivity
Month 1-3 Growth RateRevenue trajectory±10% → ±30% Year 1 revenue
Individual ChurnUnit economics±5% → ±25% LTV
Individual PriceARPU±$5 → ±$3M ARR Year 3
Seed TimingRunway±2 months → survival risk

Medium Impact​

AssumptionImpactSensitivity
Customer MixARPU blend±10% enterprise → ±15% ARPU
Headcount TimingBurn rate±3 months → ±$300K runway
Marketing %OpEx±5% → ±$500K Year 2

Low Impact​

AssumptionImpactSensitivity
Office CostMinor±$2K → <1% burn
SubscriptionsMinor±$500 → <0.5% burn
Tax RateNet income only±5% → minimal runway impact

12. VALIDATION CHECKLIST​

Before Using This Model​

  • Validate pricing against current market (Cursor, Copilot, Codeium)
  • Confirm seed timing with investor conversations
  • Test growth rates against comparable companies
  • Verify salary assumptions match hiring plan
  • Review churn assumptions against industry benchmarks

Assumptions Requiring Periodic Update​

  • Pricing (quarterly)
  • Growth rates (monthly actuals)
  • Churn rates (monthly cohort analysis)
  • CAC (monthly by channel)
  • Headcount plan (quarterly)

Last Updated: February 5, 2026
Author: Hal Casteel with assistance from Claude 4.5
Source: CODITECT_Financial_Model_Final.xlsx