FlorianDargel

Funding software companies' move to Saas

A preceptive analysis of the funding challenges facing the majority of smaller, self-funded software companies operating under the standard, perpetual license model. The authors argue that these firms, although in many ways stuck an unhealthy business model, face significant funding gaps if they follow the current fashion for switching to a 'Software as a Service' (SaaS) model. They think that many firms will find that their cash flow might not sustain them while they build up the regular, but smaller income stream based on services. At the very least investment in new features and R&D will suffer, and therefore competitiveness. For instance, approx. 90% of US software firms are believed to turn over less than $10m, and have no more than $0,5m in cash on their balance sheets. I don't know the figures for Europe, but would be surprised if they were better. The distribution of revenue/firm is even worse, from memory >90% of German software firms make <€5m turnover.

If this analysis is right, then there might be a large funding opportunity developing: mature, stable software companies that could, given some investment, shift to a business model with better economics and competitive situation. I've talked to a number of people recently that seem to be in such a situation, it will be interesting to see how they cope.

Link: Sterling-Hoffman Executive Search

6A new funding

Strangely quiet - how come this hit PE Week Wire before the blogs?

Six Apart Ltd., a San Mateo, Calif.-based provider of blogging software, has raised $12 million in new VC funding, according to Investment Dealers’ Digest. No word on the new backers for Six Apart, which previously raised money from August Capital. www.sixapart.com

Decentralised Power

Just saw this article on the new project of the Segway inventor. A little less hype this time, a little more utility I'd say. Decentralised power supply is the way to go, cool idea. I hope the technology lives up to the hype:

"... he's invented two devices, each about the size of a washing machine
that can provide much-needed power and clean water in rural villages."

The Segway creator's next entrepreneurial spin

Stylish base for snowboarding

Snowboarding at the weekend was a blast. Loads of fresh snow and sunshine (sorry no pictures too busy to make fresh tracks). I was part of a house party staying at "chez Brunnthaler". On a southfacing hillside it featured every comfort I enjoyed myself very much. Snowchains recommended, although I'd always choose the view over convenience.

FON on a roll

Martin is on a roll: Stockholm, Paris, Silicon Valley, Munich etc to launch his WiFi Service and now blue chip funding in regions rarely seen in Europe: € 18m for a project launched 90 days ago. Or should I say movement? Congratulations!

Hattip Pikeblog