Net dollar retention and capital efficiency aren't just buzzwords

5x growth is table stakes

Author

Michael Morgenstern
February 20, 2024

Happy Tuesday Brex community,

Net Dollar Retention (NDR) and Capital Efficiency aren't just buzzwords, but the lifeblood metrics for Series A startups. Sure, a 5x yoy growth rate sounds fantastic, but it's a surface-level vanity metric if your NDR and Capital Efficiency aren't on point.

NDR isn't just about keeping customers; it's about measuring their growing addiction to your product. It's a raw, unfiltered gauge of whether you're truly solving a pressing need or just another solution in a crowded market. High NDR? You're a market whisperer. Low NDR? Time to pivot.

Capital Efficiency, on the other hand, is your startup's reality check. It tells you how smartly you're turning investor dollars into growth. It's a brutal measure of your operational savvy – are you a lean, mean, growth machine, or just burning cash like there's no tomorrow?

Bottom line: In the current Series A jungle, 5x YoY growth is just table stakes. The real winners know that NDR and Capital Efficiency are the kingmakers. Feel free to schedule time with me to dive in and turn these metrics into your secret weapons.

Growing together, Michael Morgenstern

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Startup of the Week 🤩 

Rune Hauge, Founder and CEO of MentorCam

MentorCam is a marketplace where people can book 1:1 calls with the world's best experts for advice on business and professional growth.

Book 30 or 60 minute video calls with the worlds best business leaders to ask questions and get answers on your business. Learn from business leaders how to: scale your business, raise funding, grow a brand, increase sales, launch new products and much more. Mentorcam’s network of elite founders and business professionals are available to you on-demand. Whether you work with a specific expert or seek input from multiple advisors, your network just got instantly stronger.

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Emerging Manager Spotlight 🤩 

Devan Malhotra is Co-founder and Managing Partner at Valhalla Ventures 

Valhalla is an early-stage fund based in Los Angeles, CA. Valhalla Ventures backs visionaries building enduring moats. Today, the most enduring moats exist in physical technology (think industrials, space, chips, biology, defense, energy, etc) and media IP (think games).

Valhalla manages $200M+ in assets with $150M in committed capital across all vehicles to date. Outside of work, Devan is a self-addmitted adventure junky - he spends his weekends flying planes and helicopters, skydiving and kitesurfing. He is also the founder of a non-profit based in India (indianhumanrights.org) that is focused on restoring and protecting rights of marginalized communities.

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