Key questions for enterprise software investing
Talk to most growth capital firms, especially those on the West Coast, and you'll hear how they love enterprise software because of its long-term recurring revenue characteristics and stickiness.
To get through the door of most of them you'll need to demonstrate sustained year-on-year growth in excess of 20%, and annual recurring revenues of US$10m or more. Investors love recurring revenue because they support much greater scalability than one-off sales. Non-recurring revenues linked to consultancy, implementation, or even hardware are much less of interest.
But crossing those basic hurdles is just the beginning, and that's when the serious scrutiny begins. So what are these investors looking for?
Daniel Domberger, Managing Director and co-lead of Arrowpoint Advisory's TMT sector team, shares his insights with Computer Weekly on the best strategies for securing this investment. Daniel assesses the need for customer retention, mission-driven solutions and most of all strong leadership, as pathways to success.
For a thorough guide to attracting investors in the enterprise software market, read Daniel's article in Computer Weekly here.