This document discusses how app developers can finance growth through a metrics-based approach using revenue recycling. It introduces Pollen VC, which unlocks the value of accrued app store earnings to fund advertising spend and fuel faster user acquisition and growth, without the need for venture capital. The document covers key metrics like LTV, CPI, and cash flow modeling to illustrate how revenue recycling can achieve the same user acquisition spend with a smaller initial budget or enable spending 4x more on paid user acquisition with the same budget. Developers are encouraged to contact Pollen VC to have their LTV and cash flows modeled.

1. HOW TO FINANCE YOUR GROWTH: A METRICS BASED APPROACH
MARTIN MACMILLAN, CEO

2. How to Finance Your Growth: A Metrics Based Approach 2
ABOUT POLLEN VC
MARTIN MACMILLAN, CEO & FOUNDER
Pollen VC provides a new type of growth capital for
app developers who are ready to scale
We enable developers to fund advertising by
unlocking the value in app store revenues early
Our model is a flexible and non-dilutive alternative to
equity financing, allowing developers to retail control
while growing their business
Our mission is to get start-ups to think about capital
efficiency, using the right type of funding for the
right purpose

3. 3
Everyone knows the stories about a few apps that go
viral with no promotion.
For the 99.9% of all other apps launched, it’s necessary
to spend to acquire users.
THE REALITY IS THAT YOU
NEED TO SUPPORT YOUR
APP WITH PAID UA
How to Finance Your Growth: A Metrics Based Approach

4. 4
Let’s start with the basics…
UNIT ECONOMICS OF PAID UA
LTV - Lifetime Value
• Expected value of that customer
over it’s lifetime, i.e. total
amount earned
• What does it mean for app
developers?
• How long is a lifetime?
CPI - Cost Per Install
• How much does it cost to acquire a
user?
• Where do I find these users?
• How do I target these users?
• When do I pay for these users?
How to Finance Your Growth: A Metrics Based Approach

5. 5
UA HAPPINESS
$2$1
How to Finance Your Growth: A Metrics Based Approach

6. 6
50c$1
UA MISERY
How to Finance Your Growth: A Metrics Based Approach

7. 7
RECIPE FOR SUCCESS
Understand what
it costs to acquire
a user
How to Finance Your Growth: A Metrics Based Approach
How long before
you receive the
revenue?
The revenue
they will
generate
VS
+

8. How to Finance Your Growth: A Metrics Based Approach 8
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
1
11
21
31
41
51
61
71
81
91
101
111
121
131
141
151
161
171
181
191
201
211
221
231
241
251
261
271
281
291
301
311
321
331
341
351
361
PROFIT & LOSS DOES NOT
EQUAL CASH-FLOW
Days from launch

9. 9
THE PROBLEM: PLATFORMS
ONLY PAY OUT REVENUE UP
TO 60+ DAYS AFTER YOU’VE
EARNED IT.
LAUNCH
You’re earning money from day 1
This is your money
trapped in the payment system
Platforms release
your cash…
How to Finance Your Growth: A Metrics Based Approach

10. 10
HOW TO USE THIS TO YOUR ADVANTAGE
Unlock the value of your earnings
rather than using venture capital to
fund growth
Think of your accrued
app store earnings as an
untapped asset
How to Finance Your Growth: A Metrics Based Approach

11. 11
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50
LTV

12. 12
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50
LTV
365
Day max.

13. 13
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50
LTV
365
Day max.
$1.00
CPI

14. 14
LTV CALCULATION ASSUMPTIONS
How to Finance Your Growth: A Metrics Based Approach
$1.50
LTV
365
Day max.
$1.00
CPI
1,000
Installs daily

15. How to Finance Your Growth: A Metrics Based Approach 15
$1.60
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
1
11
21
31
41
51
61
71
81
91
101
111
121
131
141
151
161
171
181
191
201
211
221
231
241
251
261
271
281
291
301
311
321
331
341
351
361
LET’S GET BACK TO LTV
Days from launch

16. How to Finance Your Growth: A Metrics Based Approach
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
16
NET CASH POSITION
Net Cash Position
first becomes
Positive
First App Store
payment hits bank
account
Spending $1,000/
day on ads

17. How to Finance Your Growth: A Metrics Based Approach 17
USING REVENUE RECYCLING
NetCashPosition
-$400,000
-$320,000
-$240,000
-$160,000
-$80,000
$0
$80,000
$160,000
$240,000
$320,000
$400,000
Weeks After Launch
0 4 8 12 16 20 24 28 32 36 40 44 48 52
Net Position w Revenue Recycling Net Position
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16

18. How to Finance Your Growth: A Metrics Based Approach 18
USING REVENUE RECYCLING
NetCashPosition
-$400,000
-$320,000
-$240,000
-$160,000
-$80,000
$0
$80,000
$160,000
$240,000
$320,000
$400,000
Weeks After Launch
0 4 8 12 16 20 24 28 32 36 40 44 48 52
Net Position w Revenue Recycling Net Position
-$100,000
-$80,000
-$60,000
-$40,000
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Recycling
revenue allows
you to achieve
same UA
spend on 20%
of your
starting
budget or
spend 4x more
on paid UA
with same
budget
c.$20,000 required
c.$80,000 required

19. How to Finance Your Growth: A Metrics Based Approach 1919
Reinvest earned LTV
directly into advertising
Acquire more
users faster
Extract LTV
on a daily basis
A NEW WAY…
Extract your LTV
as you earn it, to fund
your advertising spend
and fuel your growth.
Keep your VC money
in the bank!

20. How to Finance Your Growth: A Metrics Based Approach 20
LTV MODELLING
PollenVC is creating a set of tools using readily available metrics of
retention and ARPDAU to help developers understand and model LTV
Understand payback periods, and how to measure
Model financials based on metrics to show how much UA you can fund,
and how quickly you can grow
If your cohorts are not delivering, chop the marketing spend and
redeploy elsewhere

21. IF YOU WANT US TO MODEL YOUR LTV
AND CASHFLOW PLS EMAIL US!
martin@pollen.vc
@PollenVC