[_marlowe_]

"When you acquire some customers and they start yielding revenue that behavior sounds an awful lot like buying a fixed income instrument..."

This is so intellectually dishonest. He even goes on to equate recurring revenue with cash flow. Not the same! So often companies point to ARR as success without acknowledging other structural cost issues in their businesses.

"It's basically AAA debt. Now give me a 30x revenue multiple." -SaaS investor who wants it both ways

SaaS is just one of many recurring/contractual revenue categories, but VCs talk about it like its a revolutionary business model that should yield some extra reward from the capital markets. Recurring revenue has been around forever in more traditional industries.

Yes, reliable recurring revenue (with +FCF) can support leverage, but claiming that it looks and acts like debt is either ignorant or deceptive. It is 100% equity risk and that kind of magical thinking is just vulture bait.