Short Thesis Testing: Enterprise Software

Reported metrics lagged reality, and management framed retention optimistically. The fund needed to test the core short thesis, accelerating churn and downgrades, with the people making the renewal decision. The risk was shorting on a narrative the customers would contradict.

• +Reduced the thesis to one testable claim: is net revenue retention deteriorating faster than reported?
• +Sourced nine sources, current customers, churned customers and two former sales operators
• +Asked customers directly about renewal, seat expansion and competitive displacement
• +Screened every call for MNPI and excluded anyone with access to unreleased figures

• +Nine anonymised call notes plus a synthesis on the retention trajectory
• +A customer-grounded read on whether churn was accelerating or stabilising
• +A named list of the competitive displacement patterns customers described

• +The calls supported the thesis but flagged one stable segment, so the fund sized the short smaller than planned
• +The displacement pattern gave the PM a concrete catalyst to monitor
• +The fund re-ran the same customers two quarters later to track the trend

This is a representative, anonymised composite of a typical hedge funds engagement. Client identity is removed and the figures illustrate the format and scale of the work. They are not a record of a single named mandate. Every expert call is scoped to general market knowledge, screened for material non-public information before findings reach a deal team, and documented for audit. See our compliance framework for full detail.