Every data point Carry has shared, cross referenced against our diligence priorities.
4,052 current subscribers. 2,951 inheritable after content split (1,101 content only churn). 2,592 cross sell eligible (excl. 84 partnerships + 275 unclassified). 3,325 funded accounts.
Setup product sold as subscription — once funded, little reason to stay. 39% cohort loss within 12 months Churn — worse if courses, not 401k, are the main value driver. Biggest risk to customer count.
Early churn worsened as acquisition scaled 3x (0.3% → 4.1%/mo) Churn. But month 12 renewal churn halved (19% → 9%). Past month 24, churn → near zero.
3,070 grandfathered accounts start paying 0.20% on AUM ADV. Expect 5–20% churn (150–614 lost). Post June cohort Jan 2026 behavior is the leading indicator.
Section 37.2: assignment without written consent is void DW. If DW refuses: 7,320 accounts stuck. ACAT fallback: $263K + 20–40% churn. DW keeps AUM and fees — incentive to cooperate. Engage early.
Data received from Carry (Feb 2026). Of 2,676 classified accounts, 2,592 (97%) are either already S Corps or eligible for S Corp election — making them direct cross sell targets for Lettuce.
| Tax Classification | Customers | Avg W2 Income | Avg Net Income | S Corp Eligible? | Cross Sell Fit |
|---|---|---|---|---|---|
| S Corporation | 1,210 | $230,845 | — | Already S Corp | Direct fit |
| Pass Through (LLC) | 788 | — | $156,421 | Yes — file Form 2553 | High potential |
| Sole Proprietorship | 524 | — | $109,950 | Yes — form LLC first | High potential |
| C Corporation | 70 | $168,247 | — | Yes — with conversion | Moderate |
| Partnership | 84 | — | $353,009 | No — multi owner | Not eligible |
| Total Customers | 2,951 | All paying $29/mo (2,592 cross sell eligible) | Full subscription base | ||
Key insight: 1,210 are already S Corps (Lettuce's exact customer profile). 1,312 pass throughs and sole props earn enough ($110K to $156K avg) to benefit from S Corp election — the core Lettuce value prop. Only 84 partnerships (3%) are ineligible. 275 accounts remain unclassified.
Carry → Lettuce Complete
18% opt in → 466 convert to Lettuce Complete ($99/mo Y1 → $349/mo Y2). Opt in, not forced. [See pricing sensitivity models here.]
Lettuce → 401k (AUM Growth)
8% conversion (48 customers) → $29K Y1 / $54K Y2+ avg deposits each (regression from historical data), compounding at 7%. All 401k holders contribute annually. Pro→Complete upgrade adds $201K/yr.
Flywheel works both ways at near-zero CAC. All cross-sell is opt-in.
Q4 tax deadline = natural trigger. Dec 2025: 705 signups CM.
Subscriptions are declining. AUM is compounding. Price the AUM.
First MRR decline Jan 2026 CM. NRR 66%, Quick Ratio 0.55, ARPU $79→$24 Derived. Content funnel sold separately → expect further decline.
$218M total, 89% from deposits CMDerived. $7.1M/mo inflows, accelerating. AUM/subscriber: $24K→$54K. BD/RIA: $0.80M/yr Y1 (calibrated to actual $840K on $218M, rate adjusted). AUM compounds from $54K avg annual deposits per existing account ($29K first year for new accounts) + 7% market returns. Cross sell converts (Lettuce customers buying 401k) add $29K Y1 / $54K Y2+ per account, further accelerating AUM growth.
Robo-managed only ($205M, 94.2%) ADV. 76% grandfathered at 0% until Jan 2027. Current: ~$15K/yr. Full potential: $410K/yr Derived.
Recommendation: Scenario 1 + B1 ($99 Y1 → $349 Complete)
$99/mo Y1 promo (Carry only). Lettuce Complete $349/mo from day 1. Multi-tier churn: 8% for bundle, 0% for 24+ month customers. $9.81M over 2yr (+67% vs baseline). Y2 revenue surges to $5.92M as Complete pricing kicks in. Runner up B2 ($9.31M) retains more customers. Zero growth assumed.
Purchase price is the start. Ongoing costs determine payback.
LTV/CAC: 3.9x Derived. Jan 2026: $3.29 lost per $1 gained. $358K/yr sub burn. AUM subsidizes.
Personnel $883K/yr (5 retained: CCO, COO, 2 Eng, 1 Ops) + non personnel $173K/yr (infra $81K + compliance vendors $42K + regulatory/insurance $50K) + AML setup $25K + migration churn $77K = $1.16M/yr Y1. Ongoing: $1.06M/yr Model.
New SEC rule by 2028 Ext. Setup $25K (Y1), ongoing $28K/yr (Y3+). Sardine.ai covers KYC ($24K/yr). Annual AML audit + training from Y3. Penalties: $250K+/violation.
⚠ Distraction Cost: This Is Real
Another distraction on top of healthcare. BD/RIA requires ongoing compliance, reporting, and oversight.
CCO needed on staff ($238K). Retained in acquisition plan.
Even run-as-is needs SSO, data sync, cross-sell flows. Budget part-time eng minimum.
Healthcare already stretched the team. Two new verticals competing for same leadership and eng bandwidth.
Payroll data received. Lean team: 5 retained staff at $883K/yr + $173K non personnel (infra + compliance + regulatory) + $25K AML setup + $77K migration churn = $1.16M Y1 cost. 2 engineers handle migration internally.
Fair value: $3.83M–$5.67M (blended 70% AUM at 2–3% of current $218M + 30% SaaS at 2.5–3.5x current ARR of $1.03M). Recommended offer: $3.83M–$5.67M (= fair value range). ~1.3 year payback at midpoint from Y1 acquisition revenue against $1.16M Y1 cost. AUM compounds $218M→$523M by Year 5.
Recommended Offer Range
Recommended offer range. Fair value model based on Carry's current state ($3.83M to $5.67M) supports this range; targeting low end gives Lettuce favorable terms. Model
Post Acquisition Revenue (Year 1 Projection)
At midpoint ($4.75M): ~1.0x Year 1 acquisition revenue ($4.70M). Y1 cost $1.16M (personnel + compliance + migration churn). Enterprise value at 6 to 8x Year 3 acquisition revenue ($7.10M): $43M to $57M. Acquisition cost pays for itself within 1.3 years.
Tech is commoditized overnight. What can’t be replicated: customers, regulatory standing, time.
If Lettuce passes, a competitor gets 2,951 solopreneurs who need exactly what Lettuce sells.
AI replicates software in weeks. What it can’t create:
2,951 customers
2–3 years and $1M+ to build organically.
$218M in custodied AUM
$0.80M/yr BD/RIA fees Y1 (rate adjusted). Compounds to $523M by Y5. AI doesn't generate AUM.
Trust and track record
Clean SEC history, SOC2, 3+ years ops data. Earned, not generated.
The technology is the least valuable part. Customers and trust are the asset.
AI accelerates code, not government approvals:
All included on Day 1.