NEW INVESTMENT: Grove announced a $10 million investment from Volition Capital (“Volition”), a leading growth equity firm that notably was a large investor in Chewy.  Read More

NEW INVESTMENT: Volition Capital Invests $25M in hackajob  Read More

VOLITION NEWS: Volition Capital Named Top 25 Growth Equity Firm  Read More

ANALYSIS: Rule of 40 Index: Year in Review  Read More

VOLITION UPDATE: Volition Capital Announces Closing of Volition Capital Fund V, L.P. with $675M in Capital Commitments  Read More

NEW INVESTMENT: Zenarate AI Coach Transforming How Agents Learn and Perform through AI Simulation Training  Read More

WHY WE INVESTED IN ZENARATE: Why Volition Invested in Zenarate  Read More


CPAAS: A Core Metric at Volition

Good Morning!

In today’s edition of the Volition View, we look forward to sharing a thought piece from Volition Vice President, Claude de Jocas, on one of our favorite in-house metrics when it comes to looking at businesses: CPAAS.


  • Deep Dive: Contribution Profit After Advertising Spend (CPAAS)
  • Portfolio Media: Creatio Launches 8.1 Quantum
  • Market Perspective: How Long Do Employees Stay at Startups For?
  • Portfolio News:  ZenaratePramataSUPER73, Inc.
  • Portfolio Fun: Vik White x Creatio

Let’s Dive In!


 CPAAS: A Core Metric at Volition


In today’s macro-environment, the landscape that founders have to navigate through is complex, to say the least. While investors are demanding a drive toward profitability, the reality is that continuing to invest in growth responsibly is often the correct course of action. The question then becomes, what metrics should be used to analyze the health of a business while continuing to invest in growth? Below, I look forward to sharing a metric that has become standard at Volition – CPAAS. 


Contribution Profit After Advertising Spend (CPAAS) is the profit remaining after deducting advertising spend from contribution margin. Contribution margin is defined as revenue minus variable costs (costs associated with the production and fulfillment of an individual unit). 

Notably, contribution margin excludes fixed costs (equipment rent, executive salaries, etc.), enabling companies and investors to look at the unit-level profitability of a business. 

One of the shortcomings of contribution margin is that it does not take into account marketing expenses, as this historically is viewed as a fixed cost. At Volition, however, we view direct customer acquisition expenses as a critical component of the unit economics of a business. CPAAS allows us to go one step further by subtracting ad spend from contribution margin, thereby recategorizing certain aspects of marketing spend (typically direct customer acquisition expenses) as a variable cost. 

Here is a quick visual displaying the difference between contribution margin and CPAAS. 

  • Contribution Margin = Revenue – Variable Costs 
  • CPAAS = Revenue – Variable Costs – Advertising Spend 


Often when businesses attempt a pivot to profitability, it can lead to flat or declining revenues. While this transition is occurring, companies still need to be accountable to their board and investors and show progress. Founders often lack the metrics to demonstrate the improvements being made in terms of revenue efficiency. CPAAS is a way to illustrate to stakeholders that even while revenue might be down, the underlying fundamentals of the business can be improving quite dramatically – even if the business has yet to achieve bottom-line, or EBITDA, profit.


Company A is a direct-to-consumer e-commerce company that was previously operating with a “grow at all costs” mentality. Recently, management and the board aligned on a more sustainable growth strategy, one that balances growth and profitability. As a result, the Company pulled back meaningfully on total advertising spend, focusing only on its most efficient acquisition channels, which resulted in a 10% year-over-year decline in revenue.


Let’s take a look at two ways Company A could present its financials: Without CPAAS and with CPAAS.

The table above shows that Company A’s revenue was down 10% YoY, contribution margin was neutral YoY, and contribution profit was also down 10% YoY. This is likely to be a difficult conversation for management to navigate with their board, as both revenue and profitability, defined here as contribution profit (revenues – variable costs), have declined. Now let’s take a look at an alternative way Company A could present its financials including advertising spend:


By including advertising spend as a component of CPAAS profitability, the improved efficiency of the revenue is highlighted. Although Company A’s revenue decreased by 10% YoY, the advertising spend decreasing by 80% leading to a 150% increase in CPAAS and overall a CPAAS positive business. Furthermore, it becomes apparent that revenues in 2022 were unprofitable on a CPAAS basis, and that the strategy shift in 2023 has set the company on a more sustainable path.

These two charts display that a simple reclassification of advertising spend into a variable cost can greatly change how you position your company’s financial trajectory. By integrating the CPAAS formula as part of your financial reporting, this can help you, your executive team, and board better understand the unit economics and progress of your business, particularly when embarking on a pivot towards profitability. 

Talk soon, 



Creatio Launches 8.1 Quantum


Last week, Creatio announced the launch of a major new release, 8.1 Quantum. 8.1 Quantum includes several major innovations like new composable apps for CRM, integration with generative AI, a full-blown no-code governance application, and more.

Along with the launch, Creatio shared a digital show featuring bestselling author, Seth Godin, and a keynote on the future of the business by Katherine Kostereva, CEO of Creatio. Make sure to check out the show below:

Link: Click Here


How Long Do Employees Stay at Startups For?

  • 21% of employees stay at startups for less than one year
  • 9% of employees stay at startups for more than 4 years
  • 47% of employees at $500M+ companies stay for 1-2 years vs. 34% at startups at a valuation between $10M-$25M

Source: Peter Walker, Carta


Zenarate, Pramata, Super73


Vik White x Creatio

1696002377613 1

Along with the launch of Quantum 8.1, Creatio partnered with influencer Vik White to create a customized “no-code” dance performance. Make sure to check out the dance here

Thanks for the read! We would love to hear what you think, so feel free to send us an email  if you would like to chat.

-The Volition Team


The views and opinions expressed herein are solely those of the author and do not reflect the views or opinions of Grove Collaborative or its affiliates. The author does not guarantee the accuracy or completeness of the information provided in this document. You should not treat any opinion expressed herein as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of the author’s opinion. All information provided is for informational purposes only, and shall not be relied upon as personal financial advice. Any reference to a specific investment strategy is only to assist in learning, and shall NEVER be relied upon when making future investment decisions. Except where otherwise indicated, the information provided herein is based on matters, opinions and views as they exist as of the date of preparation and not as of any future date, and the author undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional materials.

The author and the author’s affiliates may currently have long or short positions in the securities of certain of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Investments in securities involve the risk of loss. Past performance is not indicative of future results. Neither the author, Volition Capital, Grove Collaborative nor any of their respective affiliates guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed herein.

Neither the author nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. In addition, nothing presented herein shall constitute an offer to sell or the solicitation of any offer to buy any security.


Claude de Jocas

Vice President

Claude de Jocas

Vice President


This field is for validation purposes and should be left unchanged.

This field is for validation purposes and should be left unchanged.

This field is for validation purposes and should be left unchanged.

This field is for validation purposes and should be left unchanged.