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by fredsters_s
3479 days ago
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It's opportunistic investment from investors who predict continued growth. The hook for the founders? Who knows. My guesses: - assumption that eventually the enterprise play will win the majority of the $ in the market - that there is possibly a winner-takes-all dynamic in the market, given the strong ecosystem benefits Also, it's very expensive to sell top-down to enterprises. In SaaS your cost of sale is up-front (sales salaries, commissions, acquiring the customer etc) whereas the payout is typically over time. Even if the contracts are mostly paid up front, you still have to build the enterprise sales team and ramp the reps, which can take around 6 months. So it's possible that the logical premise "pumping all this money into firms that clearly don't need such vast amounts of it" may be incorrect if enterprise sales success is required for long term success and they don't have the cash to 'go enterprise'. Will be fascinating to see how this market plays out. My money is on Sid. |
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