For the past few weeks, my feed has looked like an IM8 showcase room.

CRO influencers breaking down their adjustments. Media buyers crying that if only they could work with a brand that understands LTV like IM8. Subscription guys praising the quarterly plan flow. Creative strategists explaining UGC and micro seeding.

It almost feels like if you implemented it all, you would end up like IM8 — what the company calls the fastest-growing premium supplement brand ever recorded.

Now, if you have been with me long enough, you kind of get what is about to follow.

Me being me, red flags raised. Cynicism level through the roof.

If everyone is on board with this, my logical defence is always that everyone is wrong.

Something didn’t add up. So I did the thing I wasn’t seeing much of in these breakdowns.

I read the shareholder letter. All 41 pages, including the reconciliation tables at the back.

The letter is beautiful. I mean it.

It might be the best piece of financial storytelling I’ve read from any D2C company.

Every number has a frame, every weakness has a reframe, and the whole document builds toward one milestone: consolidated Adjusted Free Cash Flow turned positive in July.

I mean, they did it, guys. They are cash flow positive, and all while burning all this money on ads, micro influencers…

Except those first two words are doing a lot of work.

Adjusted. Free.

So I went back to page one and read footnote 1 once again.

Here it is, word for word:

Read it again. Not getting it yet?

Here is a little context. IM8 triumphantly announced that they secured $1B in growth financing from the General Catalyst Customer Value Fund.

Now, that is a headline, and we all know headlines are there to get your attention.

So again, me being me, my attention got caught, and then I did something you never do… I actually read the disclosed terms of the “raise.”

Well, long story short, it isn’t an equity raise. It’s a financing commitment they draw against to fund marketing, with General Catalyst getting paid from the customers that financing helps acquire.

The billion is the commitment. It doesn’t mean a billion landed in their account.

Now let’s get back to the footnote.

If you read the last part carefully, you will notice:

Plus net fundings. The financing is inside the metric.

The actual net cash used in operations at Prenetics, IM8’s parent company, in the first half of 2026 was $27.9 million. It’s right there in the cash flow statement.

The July milestone includes net funding from General Catalyst.

Now, to be fair, they don’t hide this only in the footnote. Page 13 explains it directly. Strong cohorts attracted the capital. The capital freed the cash flow.

They tell you what they did.

But read “cash flow positive” in a social media breakdown and tell me whether this is the picture you have in your head.

And the timing. The GC facility closed July 14. The milestone arrived in July.

July also brought better operating numbers. CAC fell, revenue grew, and the adjusted EBITDA loss narrowed. So no, I can’t tell you a bank wire was the only thing that changed.

What I can tell you is that a metric which adds financing to operating cash flow does not establish that operations themselves became cash flow positive.

There is a difference between customers funding your growth and someone financing the time it takes your customers to pay you back.

And that difference is the whole story.

Once the footnote kind of ruined the whole fun, I started going through the numbers the way I’d run them for any client.

Here are some interesting findings.

In Q2, IM8’s reported CAC was $301. The average new customer’s first order was $207. Apply their approximately 65% gross margin, and that first order produces about $135 in gross profit.

Every customer walks in the door with roughly $166 of acquisition cost still to recover.

Before overhead. Before the partner costs excluded from that CAC.

They acquired 118,493 customers in Q2. Multiply that by roughly $166 and you get about $19.7 million that first-order gross profit hasn’t covered.

Now, that isn’t a lifetime loss. Most of these new customers chose subscriptions. The entire bet is that they come back.

It also isn’t a calculation of their quarterly loss. Repeat orders bring in more gross profit, and running the company brings in more expenses.

Their reported Q2 adjusted EBITDA loss was $18.3 million for IM8, and $19.0 million for Prenetics as a whole.

But the first-order math tells you something useful.

The funnel everyone is swiping comes with a funding requirement.

You don’t just need the customer to be worth more than you paid. You need the money to survive until they are.

And the famous “CAC held flat while we doubled spend” headline? Supported by their numbers. Acquisition marketing went from $18.3 million in Q1 to $35.7 million in Q2, while CAC edged down from $305 to $301.

Then July CAC fell further, to $239, on preliminary figures.

Good. That matters.

It still doesn’t make the first order pay for the customer.

This is the question that actually matters.

IM8 is carrying that upfront acquisition gap, growing, and raising guidance.

First, this wasn’t a company sitting there with its last dollar waiting for General Catalyst to save it.

Prenetics reported $109.4 million in cash and current financial assets at June 30, before the facility closed.

Second, the customers do buy again. The letter says the mature cohorts General Catalyst underwrote had returned $1.44 in gross profit per acquisition dollar, rising to $1.52 a month later.

That is gross profit against their defined acquisition spend, not net profit after every cost. But it matters. Ignoring repeat purchases in a subscription business would be as stupid as ignoring the cost of acquiring them.

Now let’s look at two parts of the machinery that don’t come with the landing-page screenshot.

The letter has a section proudly titled “Co-Owners, Not Endorsers.”

Beckham co-founded the brand. Giannis joined as a Global Partner. Inter Miami took equity, with group player NIL rights including Messi in the deal. Sabalenka, Bearman, Jay Shetty — the ownership roster is impressive.

The story: we don’t rent celebrity attention, we share the company with people who believe in it.

Now open the financial tables and find what sits alongside that ownership.

A brand licensing royalty: 5% of revenue until cumulative IM8 revenue reached $100 million, then 3.5%.

Ambassador contracts and licensing on a separate line.

In Q2, those two lines totalled roughly $4.3 million — almost 10% of IM8 revenue.

Nearly six times the consolidated R&D expense for the quarter.

And this is where my cynicism went through the roof.

The letter has an entire section called “Science: The Bar That Builds the Moat.”

Research and development, Q2: $757 thousand.

Selling and marketing: $41.3 million.

Fifty-five times more.

One quarter’s spending doesn’t tell me whether the science is good. But when you tell me science builds the moat and then spend fifty-five times more selling it, forgive me for spending more time reading the marketing economics.

Now, those partner costs are aggregate costs. The letter doesn’t let me assign all of them to Beckham, or tell you every partner has the same deal. Giannis’s partnership is explicitly described as all-equity.

But that is exactly the point.

“Co-owner” doesn’t tell you what the attention costs.

Equity, royalties and contracted fees can sit in the same business. You have to read the actual structure.

A royalty tied to revenue gets calculated before you know whether there is any profit left. The company can lose money and still owe that royalty.

And now the last part. Footnote 2 defines the famous $301 CAC as excluding licensing and royalty fees. Ambassador contracts also sit on their own line, outside acquisition marketing in the financial breakdown.

So if brand and ambassador contracts are not a contribution toward acquisition, I don’t know what is.

You can debate how much belongs to new customers, retention or long-term brand building. Fair enough.

But the cost doesn’t disappear because the CAC definition leaves it out.

The attention might arrive without paying for a click. That doesn’t mean the attention is free.

General Catalyst committed $1 billion against IM8’s cohort economics.

The mechanics: GC finances up to 70% of marketing spend on a monthly cohort basis. In return, it receives a capped share of income tied to the cohorts it finances.

The disclosed reference income is customer collections multiplied by an assumed gross margin. Once GC has recovered its investment and capped return on a cohort, all subsequent value from those customers belongs to IM8.

What’s the price of that money?

The actual return multiple isn’t disclosed in the letter or the financing announcement.

All that discussion of cohort economics, and I still can’t calculate the financing cost per customer.

In the Lemonade precedent this same letter proudly cites, public filings specify repayment of the investment plus a 16% return — effectively 1.16x the funded amount. That isn’t an annual interest rate, and it isn’t evidence that IM8 pays the same. Lemonade’s filing ↗

Now, there is an important detail here that makes this better for IM8 than an ordinary loan.

According to Prenetics, there is no fixed repayment obligation, no maturity date and no recourse beyond the funded cohorts. GC’s recovery depends on what those customers actually generate. For accounting purposes, Prenetics says it will record a financial liability and recognize the return as interest expense. Prenetics’ financing announcement ↗

So GC is taking risk too.

But IM8 is still giving up a share of cohort income to get acquisition money upfront.

That can be a good trade. It can be the trade that lets you build the company much faster.

It is still a trade.

And “non-dilutive” tells you they didn’t sell shares. It doesn’t tell you the money is free.

Strip the framing and here’s the machine:

Celebrity reach and marketing help build demand. Demand produces customers. Returning customers produce cohort income. Those cohort economics attract financing. Financing helps buy the next cohort.

The customers have to keep paying for the loop to work.

The funnel, the thing getting screenshotted, is one gear in it.

This is why “model IM8” is the same industry disease I keep writing about, in a new costume. It’s the promise that the visible surface contains the causal story.

The visible surface doesn’t tell you how much attention costs, how long acquisition takes to repay, who finances that gap, or what they get in return.

That part lives in a royalty deal, a cap table, a financing institution, and a footnote.

Copy the quiz and the lander at your economics, with your money, and you still have to fund whatever gap exists between acquiring the customer and getting paid back.

You don’t inherit their celebrity relationships. Their balance sheet. Their cohort history. Or their financing terms.

You can run out of money holding a “proven” funnel and a spreadsheet showing the customer will eventually be profitable.

Eventually doesn’t pay this month’s bills.

Now here is the fun part.

Everything I just broke down is something you are probably already familiar with.

Similar deals, just with smaller numbers.

That influencer who doesn’t want a flat fee anymore, wants 10% rev share because “we are partners”?

Before you celebrate the partnership, ask what the percentage applies to.

Sales they generate? Every sale? For how long? Alongside equity or instead of it?

You might be getting a partner.

You are also agreeing to a price for their contribution.

If the deal takes a percentage of your entire business, model it against your entire business. Including the orders they had nothing to do with.

And that email sitting in your inbox right now, “non-dilutive growth capital, repaid daily from your sales”… I know you got one. Everybody got one.

Same broad problem being solved. Money now, paid back from future business.

But don’t assume you are getting IM8’s terms.

What revenue can they collect from? What happens if sales fall? What’s the total repayment? Can they come after the rest of the business?

“Non-dilutive” answers none of those questions.

Now you know what to read before you sign.

So no, I didn’t read 41 pages to find you a better quiz.

I read them because the tactics on your feed can expire in a quarter, while the deal structures can shape your business for years.

And there is one place to start learning them. The same thing I did at the start of this article, the thing missing from too many of the breakdowns.

Read the primary document.

The funnel screenshots only show you the part the customer sees.

— Brat

P.S. Next time someone shows you a screenshot of their "proven" funnel, ask what it costs them to run it. The answer's never in the screenshot.