30% profit margin? I though most tech companies had a lot of trouble breaking even.
Sneak peek at future of SaaS investing
41–50 of 77 posts
Re: Sneak peek at future of SaaS investing
#42[deleted]
Re: Sneak peek at future of SaaS investing
#43Earlier quoted context omitted.
Almost any tech heavy ETF such as XLK or VGT will get you there. 10 year yearly returns are over 15%. For less risk, you could do a total stock market index like VTSAX (10 year returns around 13%.) Nothing is guaranteed or "continuous" though. This is less risky than investing in a single, private company that probably has little liquidity.
Looking at 10 year returns isn't good enough because we have been in a bull market for over ten years. You need to increase the horizon to get more accurate returns
This is going to be one hell of a bear market. Can't wait.
Re: Sneak peek at future of SaaS investing
#44Only a little related to this, in recent months I've spoken to ~60 growth stage equity funds and found out that essentially all transformed to be SAAS focused investors. That means they abandoned 1/3 portfolio strategy they used to have (1/3 loses money, 1/3 returns exactly 1, 1/3 returns fund) but instead are focusing on steady returns by SAAS companies at 2-3x of the investment. There are a few major implications:…
Just as the shrewd investors who have been printing cash here for decades are moving out.
Always right on time.
Re: Sneak peek at future of SaaS investing
#45I think we'll need more examples then just Buffer. Everyone knows Buffer is a successfully bootstrapped company that grew kind of big but not massive. If the author gave five other examples, then there's a case, but pointing out the one known example doesn't provide enough evidence in my opinion. A separate point on style and punctuation: too many em dashes in the wrong places. > What would make Buffer — a good inves…
I think the author uses these to imply a dramatic pause... like I sometimes do with ellipses. :-)
Dramatic pauses don't work when the reader can clearly see what comes next.
Re: Sneak peek at future of SaaS investing
#46Only a little related to this, in recent months I've spoken to ~60 growth stage equity funds and found out that essentially all transformed to be SAAS focused investors. That means they abandoned 1/3 portfolio strategy they used to have (1/3 loses money, 1/3 returns exactly 1, 1/3 returns fund) but instead are focusing on steady returns by SAAS companies at 2-3x of the investment. There are a few major implications:…
> if you don't fit their narrative, for example you have large service revenue or you have only few enterprise clients, then you are out of luck
Can you clarify this? What do you mean by "large service revenue" and why does that mean the founders are out of luck?
Re: Sneak peek at future of SaaS investing
#47Remember: Hacker News is not a financial service, and people upvoting articles about financial behaviour is not the same as financial advice. If it sounds too good to be true, it probably is, and was probably written by someone who mistook the luck of doing the right thing at the right time for a transferable skill.
Predicting that a company will grow at 10% a year forever (never flat, never down) when their growth has been steadily falling their entire history is particularly presumptuous.
Re: Sneak peek at future of SaaS investing
#48Remember: Hacker News is not a financial service, and people upvoting articles about financial behaviour is not the same as financial advice. If it sounds too good to be true, it probably is, and was probably written by someone who mistook the luck of doing the right thing at the right time for a transferable skill.
boasting about a 15% annual return with an illiquid stake in a early to mid stage private tech company is the opposite of “too good to be true”
I'm a little slow this morning but am having trouble parsing what the opposite of "too good to be true" is. Too bad to be false?
Re: Sneak peek at future of SaaS investing
#49Only a little related to this, in recent months I've spoken to ~60 growth stage equity funds and found out that essentially all transformed to be SAAS focused investors. That means they abandoned 1/3 portfolio strategy they used to have (1/3 loses money, 1/3 returns exactly 1, 1/3 returns fund) but instead are focusing on steady returns by SAAS companies at 2-3x of the investment. There are a few major implications:…
> if you don't fit their narrative, for example you have large service revenue or you have only few enterprise clients, then you are out of luck Can you clarify this? What do you mean by "large service revenue" and why does that mean the founders are out of luck?
It was poorly phrased so I changed it. I meant that if a big chunk of your revenue comes from services, they are not going to be very enthusiastic about your business.
Re: Sneak peek at future of SaaS investing
#50Only a little related to this, in recent months I've spoken to ~60 growth stage equity funds and found out that essentially all transformed to be SAAS focused investors. That means they abandoned 1/3 portfolio strategy they used to have (1/3 loses money, 1/3 returns exactly 1, 1/3 returns fund) but instead are focusing on steady returns by SAAS companies at 2-3x of the investment. There are a few major implications:…
Just as the shrewd investors who have been printing cash here for decades are moving out. Always right on time.
Seems like this trend is only starting to begin...