# The Business Model ## Annual platform subscriptions sold into high-volume regulated networks | Measure | Stated | | --- | --- | | Base ACV | $80k | | Gross margin | 75 to 85% | | Sales cycle | 12 to 18 months | | Year 5 target | ~$25m run-rate, ~300 clients, 40% EBITDA margin | | 24-month plan | 30 clients, ~$2.4m run-rate | The revenue equation is customers multiplied by ACV, with expansion coming from more sources, more downstream consumers, more geographies and white-label services. > [!important] Where the budget comes from > The purchase is framed as self-funding. Customers already pay for expensive analytics, so reducing ingestion load ==creates the budget that pays for the platform==. That is a materially easier conversation than asking for new spend, and it is what makes an 80k ACV reachable without a board-level decision. Cross-checking the target: ~300 clients at $80k is ~$24m, so the Year 5 figure is internally consistent with the stated ACV. The 24-month milestone of 30 clients at ~$2.4m carries the same arithmetic. > [!warning] The tension to hold > A 12 to 18 month sales cycle and a path to 30 clients in 24 months mean the first cohort must effectively already be in motion. That places the weight on the current pilots converting, and on channel deals carrying volume that direct sales cannot. ## Why it matters The numbers hang together, which is not always the case. What they depend on is cycle time rather than pricing, so the thing to track in diligence is how long a pilot actually takes to become a paid deployment. ## Related - [[Red Onion MOC]] - [[Go-to-Market Across Three Regions]] - [[Who Buys and Why]] - [[TelemetriX - Questions to Follow Up]] - [[pricing]]