a16z Podcast: Valuing Today’s Fast-Growing Software Companies
Here’s a head scratcher: When faced with valuing software-as-a-service companies (in simple terms, those that sell software via a subscription model and the cloud), the faster the business grows the worse the economics may look. At least in the beginning.
Andreessen Horowitz’s managing partner Scott Kupor, corporate development opeating partner Jamie McGurk, and investing team analyst Preethi Kasireddy unpack the SaaS model, describe how a16z figures out the value of these companies, and determine what makes them so “sticky.”
Finally, if growth hurts so bad — in economic terms anyway — when does it start to feel better?