In startup fundraising, capital efficiency is a key criteria for investors.

They look to see how efficiently the startup uses capital.

This most often shows up in revenue per employee, cash burn rates, and use of funds.

To achieve higher capital efficiency, focus on setting up systems within the business.

Systems always achieve a higher productivity rate.

Design the work to create a flow process.

Some startups design the work to be resource-efficient.  

In this case, each resource, such as a team member, is at full capacity.

The better process is to design the system to provide flow efficiency.

That means the system is optimized for the flow of work rather than the use of each team member.

Determine the core work that must be done and design the team to work in an efficient flow.

Consider the flow of operations in your startup and set up the system so the work gets done in the most efficient manner.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.