Some of the biggest tech businesses in the world are using this model.
It provides them with a predictable and quantifiable way to grow revenue, and it lets them do it fast.
It’s little wonder why tech investors and venture capitalists are so in love with this approach.
Everyone from asset managers like Blackrock to venture capitalists like Marc Andreessen love investing in companies with these traits.
In fact, Morgan Stanley has even gone on record to say the best way to look for the next $100 Billion company is in this space.
But it doesn’t end there…
This model offers entrepreneurs low barriers to entry, meaning it’s easier for them to start these kinds of businesses. And as the business scales, it becomes a lot cheaper to services customers, making profit margins look fantastic in the long run.
And for investors?
Businesses with this model tend to get bought out quite often, or even IPO (list on the stock exchange), netting investors tidy sums of money in the process.
It’s a win-win for entrepreneurs and investors alike!
So, what exactly is this model, and why are investors pouring their capital into these businesses?
Let me show you…
Why Tech Investors Love the SaaS Business Model