Executive Summary Artificial intelligence is changing how enterprise software creates value rather than eliminating the need for enterprise software itself. The most investible software companies will increasingly be distinguished by durable competitive advantages that AI cannot easily replicate. These include ownership of mission-critical operational data, deep workflow integration, regulatory positioning, proprietary transaction infrastructure, scarce datasets, […]
Read MoreArguably the greatest tension for founders in financing their company is a combination of understanding the tripartite dilemma arising from the expectation of ROI from capital providers, company valuation and ownership dilution. In this memo, we explore the issue of ownership dilution simply in the context of median market data and notwithstanding that each situation […]
Read MoreStepChange Research Insights examine emerging trends in technology investing, valuation, commercialization and venture capital. Our objective is to provide practical, data-driven perspectives that help founders, investors and corporate leaders make more informed strategic decisions. Growth, Valuation and Investor Returns: When is a 10× ARR Valuation Justified? Executive Summary A premium valuation is not inherently good […]
Read MoreGrowth strategies that involve a “one to many” approach such as referral or distributor arrangements can be a very valuable and cost-effective way to grow a company. The downside however, is that granting unconditional or long-term distributor exclusivity can unnecessarily restrict the Company's future routes to market and reduce strategic flexibility. Exclusivity should be viewed […]
Read MoreThere is no single generally accepted “data valuation multiple” comparable to an EBITDA or ARR multiple. In this paper we look at operational data supplied back to a company or OEM through IOT solutions or more broadly hardware and software solution combinations that provide monitoring of equipment performance, utilization, failure modes, operating conditions, efficiency, maintenance, […]
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