3 ms·
I commented a few weeks ago on startup ideas saying there was a gap in SaaS financing models. VCs have been abuzz about the opportunities in slow-burn SaaS busi
by reggieband 7y ago
I commented a few weeks ago on startup ideas saying there was a gap in SaaS financing models. VCs have been abuzz about the opportunities in slow-burn SaaS businesses that have generated predictable recurring revenue streams. This created two classes of potential VC investment - pre-revenue moonshots for billion dollar unicorns and post-revenue SaaS businesses with healthy balance sheets. I lamented that left a gap for pre-revenue slow-burn SaaS businesses in unproven markets.
I can imagine debt being a potential gap filler but only in established markets where lenders have points of comparison. This article skews on the side of pushing VC money out of the post-revenue slow-burn SaaS space. To be honest, if I was a founder running a healthy SaaS business wishing to grow then I would probably prefer debt compared to handing out equity.
But if I am starting from complete scratch and my goal is to build a slow-burn SaaS business (maybe even of a lifestyle business scale) I don't know I would jump onto debt as my first choice for funding. The only viable options I see other than personal savings are friends/family, government entrepreneurial grants and potentially crowd sourcing.