Increasing Sales Growth With Reduced Funding
Friday, December 5th, 2008Ken Ross recently wrote on the Expert CEO blog about the future of
Software as a Service in today’s economy. Although he discusses software in particular, I think his arguments
apply to any company that needs to grow without using significant
amount of capital.
Historically, SaaS companies needed a significant amount of
funding to get to cash flow breakeven. This was because it takes time for the recurring
revenues to build up enough to cover the fixed and semi-fixed costs of
development, marketing and sales. For example, Ken points out that both salesforce.com
and Netsuite took over $100M in venture capital before going public.