Sort of thought the whole point of SaaS businesses with lots of employee frills and perks was to eventually attract the activist investors, leveraged buyouts, asset strippers, and other private equity managed debt, as a way to deploy institutional and pension money. Maybe it was cynical, but the point is to generate a long term trickle of ARR that is greater than the interest payments on a debt financing of control of the company, which at a product level is why you need sticky APIs that get baked into institutional customer infrastructure that will yield 10-15 years of locked-in revenue.
One of said vultures above raises debt from group of funds, buys a SaaS company, installs managers who understand cost optimization with no concept of growth, and hollow it out.
Their nut is paying the interest back to their pension fund creditors, and their yield (after fees, naturally) is the delta between what they can squeeze out of cost reductions and making that nut.
I won't name the companies I think will be those targets, but speculating about privately held security companies as an example, it sounds like there is a clear exit sized at 10-15x revenues for anyone with traction, an API, and an office that has free snacks and a climbing wall.
One of said vultures above raises debt from group of funds, buys a SaaS company, installs managers who understand cost optimization with no concept of growth, and hollow it out. Their nut is paying the interest back to their pension fund creditors, and their yield (after fees, naturally) is the delta between what they can squeeze out of cost reductions and making that nut.
I won't name the companies I think will be those targets, but speculating about privately held security companies as an example, it sounds like there is a clear exit sized at 10-15x revenues for anyone with traction, an API, and an office that has free snacks and a climbing wall.