Historically, a young tech company like ours would go out and get a seed investor, then build up to venture capital (VC) money, do a few rounds of that, and then go public—and then down the road, take some private equity money. In sum, at various points, we’d need to fill our tank with funds from different sources.
That’s changing. In today’s market, everyone wants to invest and be a part of the software-as-a-service (SaaS) revolution (our space!). Private equity and other traditionally late-stage investors prefer to be near the front of the line rather than at the back. Why? Well, one, due to the potential profit of being an early investor, but number two, because: SaaS is often a sound, stable business—why leave that market to the VCs? Few things are better than a subscription business + software. Traditionally, VCs would take a big risk backing a company like Theranos, Casper, or the failed dot-com darling pets.com (it only had half the equation: software [checked] and subscription service [not checked]). But now that we have software companies fueled by SaaS, the risk has gone down. SaaS companies (like us) are not as risky. We’re often stable and growing. For example, Bridge has had 10 years of continual revenue and membership growth, and we have 99.6% merchant retention. We did this all without taking any money from any investors. We’re SaaS-y!