§ 08Business Model & Unit Economics

Priced to the cost of the alternative — a Big Four engagement no one wants to renew.

Three tiers. Fixed platform fee anchored to buyer value, with structural expansion via governed models, agents, jurisdictions and frameworks. Every expansion vector maps to a control on the customer's obligation register.

Three tiers

Mid-market

Foundation

$18,000/ year

  • Up to 10 governed AI systems
  • 1 framework (EU AI Act or ISO 42001 or NIST AI RMF)
  • 2 jurisdictions
  • SSO, SOC 2 report, quarterly audit packs
  • Email support, 8×5

Additional systems: $900/yr

Recommended · F2000

Enterprise

$72,000/ year (base)

  • Up to 50 governed AI systems + unlimited vendor AI
  • All frameworks, all jurisdictions
  • Agent runtime controls
  • Auditor workspace + notified-body integrations
  • Named CSM, quarterly regulator briefings

System-tier: $1,400/yr · Agent-tier: $3,600/yr · Jurisdiction: $6,000/yr

Banks · Insurers · Defense · Health

Regulated

From $220,000/ year

  • Everything in Enterprise
  • SR 11-7 depth module + MRM workflow
  • VPC / on-prem deployment, BYO-KMS
  • Named validator seats + regulator direct-line
  • SLA 99.95%, white-glove SE pool

Model-validation seats + regulated jurisdictions priced individually

Revenue model

Primary + secondary streams.

StreamShare of ARR (Yr 3 target)Notes
Platform subscription (base)58%Fixed annual, multi-year discount at 3-year
Usage expansion (systems, agents, jurisdictions)27%Meters visible in-app; drives NRR
Framework modules (SR 11-7, HIPAA-AI, sector packs)9%Attached at 40%+ within 12 months
Auditor & partner marketplace rev-share4%Phase 3; low margin drag, high stickiness
Regulator/benchmark data API2%Anonymized industry benchmarks sold back as intel

Unit economics

The numbers the board will underwrite.

$47K

Blended ACV

Yr 3 target

128%

NRR

Expansion via meters + modules

5.4×

LTV : CAC

Blended, year 3

13.6 mo

CAC payback

Blended, year 3

LTV calculation (Enterprise tier)

  • ACV starting → $72,000
  • Gross margin → 86%
  • Gross logo churn → 5.5%/yr
  • Net expansion → 28%/yr (yr 1–3)
  • Effective churn → -22.5% (negative churn)
  • LTV ≈ $72K × 0.86 / (0.055 + WACC 12% − 0) → $460K+

CAC by channel (blended $85K)

  • Outbound (BDR to CAIO/CISO) → $110K CAC, 55% of logos
  • Auditor referral (Phase 2+) → $28K CAC, 20%
  • Content/SEO on regulation queries → $22K CAC, 15%
  • Partner (Big Four resell) → $140K CAC, 10%, but $180K+ ACV
  • LTV / CAC ≈ 5.4× blended

Retention tactics

Structural stickiness. Once the evidence graph is populated and the auditor is inside the workspace, rip-out cost is measured in board-visible risk exposure, not migration effort. Two audit cycles in = a customer that renews indefinitely.

Expansion by design. Every new EU delegated act, new US state law, new customer AI system, new agent, new regulated jurisdiction pushes ACV up on existing accounts. The account manager's job is largely to notify — not to sell.

Churn reduction. Named Chief AI Officer as champion + auditor as external validator = dual anchoring. Renewal risk concentrates in accounts that lose their CAIO; playbook is immediate warm handoff to General Counsel via legal-facing dashboards shipped from month 6.