20% annual discount or monthly only when i have 11 months of runway Unit Economics

Do it, but understand what you now owe.

That $7,480 is deferred revenue. It is on your balance sheet as a liability until you have delivered the months. If you spend it in Q1 and three people ask for prorated refunds in month 4, you are paying that out of Q2 cash. It is not free money, it is a loan from your customers repaid in service.

Practical guardrails that cost nothing:

• a written refund policy before you sell the first one. Prorated, not full, is normal and defensible.
• do not count annual cash as MRR. Divide by 12 or you will lie to yourself about growth.
• keep a mental reserve of maybe 20% of annual cash for the refunds that will happen.

Chargebacks on annual are also nastier than monthly. A $374 chargeback is a real hit and the dispute process is unpleasant. Send a receipt with a clear descriptor so people recognise the line on their statement.

Take the cash. With 11 months of runway you are not optimising revenue, you are buying time, and 20% is a cheap rate for money that arrives now with no dilution and nobody to answer to.

Compare it honestly to the alternatives. A loan is more expensive and needs paperwork. Raising costs you a chunk of the company and two months of your attention. Twenty annual customers at $374 is $7,480 in about a week of emailing your existing base, and the only thing it costs you is $1,870 of theoretical revenue you might never have collected anyway, because monthly customers churn.

That last point is the one people forget. You are not discounting 12 months of revenue. You are discounting the expected value of 12 months of a monthly subscriber, and if your monthly churn is 4% that expectation is well under 12 months.

The real cost is not the 20%, it is that annual hides churn for a year. Your monthly cohort tells you within six weeks whether a change worked. Annual customers cannot vote for twelve months, and when they do vote it is one loud binary event.

If you go annual, keep enough monthly customers to preserve that signal. Do not push everyone to annual just because the cash is nice.

On the "locked at the old price" worry - that is a good problem and it lasts a year. Grandfathering early supporters at a low price is a thing every successful product does and nobody has ever died of it.

Two months of runway for one week of emails is not a close call.