On Startup Capital Efficiency

One of the conversations around funding that isn’t really ever discussed much from my experience — and I even mean between founders and their investors — is the discussion of capital efficiency and the complex relationships of investor and founder psychology to long term success, startup growth and return on capital. I think there are primarily three reasons that capital discussions tend to be really distorted and startups tend to spend poorly:

Obviously you can think about the mandate for capital efficiency at the ‘corner store’ level but that is not the point of this post. The lesson and takeaway is though they don’t lead with it, investors do care about capital efficiency, and the entire video of how your company is doing since inception will be played.

Source: stevecheney.com