IFO4
Loading...A composite measure of how effectively an organisation converts deployed capital into operating output, customer growth, or enterprise value. The federation defines capital efficiency as the ratio of incremental ARR or contribution to incremental capital deployed over a measurement window, computed on a trailing twelve month basis. Capital efficiency is a Tier-1 input to the IFO4 Score per UFMS-001:3.1. Members reporting capital efficiency must disclose the numerator definition, the denominator scope, and the measurement window in every published figure.
A modern coinage from venture capital diligence practice; the formal ratio dates to the burn multiple framework popularised in the late 2010s.
Federation accreditation requires a published capital efficiency figure for each accredited entity, with full definitions. The figure feeds into the IFO4 Score calculation under MEV-Annex:4.1. Concealment of unfavourable trends is a Tier-2 conduct issue.
@misc{ifo4_glossary_capital_efficiency,
title = {{Capital Efficiency}},
author = {{IFO4 Federation Editorial Board}},
howpublished = {{IFO4 Federation Glossary, slug \texttt{capital-efficiency}}},
year = {2026},
url = {https://ifo4.org/glossary/capital-efficiency},
note = {Category: Capital; key: CapitalEfficiency}
}Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.