SaaSy Talk Unfiltered | SaaSy Talk S01.40: The Arc of a Software Investment: From Start-up Phase to Profitability

SaaSy Talk S01.40: The Arc of a Software Investment: From Start-up Phase to Profitability

January 30, 2024 / 53:54/S1:E40

About The Guest(s): Glen Kruger joined Raymond James’ Technology and Services team in 2023. His expertise includes strategic M&A for vertical business software companies and their financial sponsors, notably those in the Construction and Field Service markets.

Glen has executed 70+ M&A transactions including the sale of FieldRoutes to ServiceTitan, Real Green Systems to WorkWave, and TrackTik to Trackforce Valiant. At Raymond James, he continues to focus his attention on trends impacting the demand for Service Management and Connected Worker platforms.

Prior to Raymond James, Glen was a Managing Director at Houlihan Lokey (which had acquired his predecessor firm GCA) and has previously been a member of the Technology investment banking groups at Oppenheimer & Co. and Keybanc Capital Markets.

Glen earned an MBA in Finance from Babson College and a BSc in Mechanical Engineering from the University of Natal, South Africa.

Summary: Glen shares his journey from being a mechanical engineer to becoming an investment banker in the software industry. He discusses the role of bankers in the software investment process and the importance of market making. Glen also provides insights into the field services sector and the trends and shifts he is seeing in the market.

Key Takeaways:

Glen's transition from mechanical engineering to software development was driven by the demand for Y2K fixes.
Bankers play a crucial role in making a market for software investments and identifying demand for different types of deals.
It is important for early-stage founders to invest in relationships with bankers to gain valuable advice and guidance.
The field services sector is experiencing growth and presents opportunities for software companies, especially in the face of labor shortages.
Debt funding is a form of financing that involves borrowing money from lenders and repaying it over time, typically with interest.

Quotes:

"Bankers ought to know where the demand has come from, and not all interest is created equal." - Glen
"A good banker will talk to young companies, give them solid advice, and stick with them until they are ready to raise significant capital or look at a meaningful exit." - Glen
"The software is becoming more valuable to business owners, therefore more valuable generally." - Glen

Chapters

00:05 Transition from Engineering to Investment Banking

02:13 Introduction to the Role of Bankers

02:42 Understanding Different Types of Bankers

03:13 The Importance of Market Making in Banking

03:20 Identifying Demand and Interest in Business

04:09 The Value of Experienced Bankers

04:45 Pros and Cons of Independent Capital Raising

05:15 The Importance of Building Relationships with Bankers

10:43 The Role of Bankers in Pitching Business

13:25 Expanding Business to North America

17:37 Focus on Field Services Sector