Re:No Venture Capital Needed, or Wanted
by icedchai on Thursday June 02, 2016 @11:01PM
(#11828007)
This is a bit fuzzy, indeed. You mention "revenue", yet you are subtracting a $95mm in expenses. Did you mean profit? If so, how can the $95mm costs possibly stay fixed? Your $25mm is going towards sales and marketing expenses. It's not staying in the bank, so that should be accounted for somewhere.
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Re:No Venture Capital Needed, or Wanted
by mathattack on Friday June 03, 2016 @08:25AM
(#11829878)
I'm making the oversimplifying assumption that costs are fixed. In SaaS business, a disproportionate amount of the costs tend to be. Look at the SG&A line of Qlik, in the news for their recent sale. [0] SG&A at mature companies can be 20-30% of revenue. At Qlik it's almost all of the revenue. This is ok, because they get the revenue over time.
It's possible to create a more realistic model, but the core idea is "If you have a great company, it still can be ok to get VC money to grow it even faster."
[0] https://www.google.com/finance?q=NASDAQ%3AQLIK&fstype=ii&ei=...