5 Ways to Detect a Fake SaaS Business

By: Ned Stringham

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As the software industry evolves, there are constantly new terms and phrases created to describe and categorize each new model. And, when one of those emerging models has success and the financial valuations for being connected to that model skyrocket, impostors appear and quickly contort their firms to be part of that hot, emerging category. That’s why today, if you ask almost any software company to classify themselves, whether they’ve been in business for 2 years or 10 years, you’ll hear all the hottest valuation terms: mobile, social, cloud, big data, SaaS, PaaS. This isn’t new. Who can blame us, we want higher valuations. More

One Reason SaaS Businesses Fail

By: Ned Stringham

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The Software-as-a-Service (SaaS) business model, when working right, is a financial analyst’s dream.
Revenue is recurring, customer attrition is low, gross margins usually exceed 70% and the business can scale quickly without adding people. The result is amazing cash generation and valuations exceeding 5, 7 and even 10x revenue. It’s clear why every venture capitalist, private equity firm, angel investor and management team in the software space is in love with software-as-a-service. More