The Core Value Equation
A one-page planning model that lines up where the company is today, where next year's spending goes, and the end-of-year targets you're underwriting. The same picture works to close annual planning and to open a raise, and each year's end state becomes the next year's starting point.
The planning model.
Enter your numbers below. The four metrics on the left are your current traction — what you've already built. The four buckets in the middle are where next year's spending goes; the plus sign shows that spending drives the change, rather than being a figure added to your traction. The right side starts as a projection from your current metrics and the drop-through assumption, and you can overwrite it with the end-of-year targets you're committing to — which then become the following year's starting point. Use Roll year forward to project the same inputs across three years.
Where we are
today.
Where the money
goes.
- 01GTMDemand, sales, scale
- 02CXOnboarding, retention, expansion
- 03ProductRoadmap that compounds
- 04TalentThe hires the year depends on
Where we end
the year.
Why the model is built this way.
It's easy for a planning deck to end on a list of OKRs and for a pitch deck to end on an ask with no math behind it. This model puts both in one line: what you have now, where the next dollar goes, and the end-of-year target. Each term forces a specific conversation.
It keeps the focus on compounding, not a single snapshot.
ARR is a snapshot. ARRv is a slope. ARRa is the second derivative. Once you're tracking acceleration, the question shifts from last quarter's ARR to a sharper one: is the rate of growth still rising?
It treats investment as a required input.
You don't reach the right side without spending. Whether the dollars come from the bank account or from an investor, they land in the same four buckets — GTM, CX, Product, Talent — with no unexplained line items.
It chains years together.
The right side becomes next year's left side. Last year's outcome is this year's traction, which lets you carry the same structure into each successive raise with a larger number on the left.
It survives the audience switch.
Use the same model to close annual planning with the team and to open the raise with a board. Internally it's a goal; externally it's an underwrite. The inputs are identical; only the verbs around them change.
Each term, defined.
What each term is, and the main thing to watch when you fill it in. A soft term makes the whole model soft, so it's worth getting each definition right.
Traction
Traction is what you've already built — measured four ways, because a single number hides too much.
ARR is the headline. It's where you are. It tells you almost nothing about where you're going.
ARRv (velocity) is net-new ARR per month — bookings minus churn. This is what's actually happening right now. If ARR is the starting line and the destination, ARRv is the speedometer.
ARRa (acceleration) is how much ARRv changed this month versus last. If ARRv is the speedometer, ARRa tells you whether that speed is rising or falling. Negative ARRa means that even if ARR is still growing, the pace is slowing.
EBITDA is the cost of producing that growth. It keeps the numbers honest: growth bought with unlimited cash says more about spending than about the business.
Investment
Every dollar — from the bank account or from a check — lands in one of four buckets.
GTM. The repeatable process that turns a marketing dollar into a closed deal: demand gen, SDRs, AEs, sales ops, and the playbook itself. Spending here moves ARRv.
CX. Onboarding, customer success, support, and expansion. Spending here lowers churn and raises net retention — which lifts ARRv from the other side, and protects every prior year of bookings.
Product. The roadmap that earns the next renewal and opens the next segment. Spending here moves ARRa, because product progress compounds GTM and CX gains.
Talent. The hires that make the other three buckets possible. The first GTM leader. The first CX leader. The first staff engineer. Without the right people, dollars in the other buckets are wasted.
Outcome
The outcome is where the company ends the year — measured the same way you started.
The right side is deliberately the same shape as the left. ARR is bigger. ARRv is bigger. EBITDA is closer to (or past) zero. And critically: ARRa is still positive. If ARRa turns negative on the right side, you've added ARR but lost momentum, which makes the following year's plan harder to hit.
How the model compounds over three years.
The model is meant to run every year, not once. Last year's outcome becomes this year's traction, and across three years the numbers move substantially on the same discipline about which figures go in which boxes. The worked example below is hypothetical — illustrative, not case data. (Roll the model above forward to see the same numbers move.)
Revisit the model at each annual plan, and check the prior year's outcome against the target it set.