january 27, pre event workshop

Copyright © 2011 by Software Equity Group L.L.C. All Rights Reserved.

1

Presentation to

South Florida Technology Alliance & MIT Enterprise Forum

January 27, 2011

Ken Bender, Managing Director12220 El Camino Real, Suite 320

San Diego, CA 92130

858 509-2800

www.softwareequity.com

Software M&A Insights: 2010 in Review, What Lies Ahead, & What Really Drives Exit Timing & Valuation


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• Established in 1992, SEG is an internationally ranked boutique investment bank focused exclusively on the software industry, representing public and private software company sellers, public and private software company buyers, and several of the world’s leading private equity/LBO firms

• Global presence providing advice and guidance to more than 2,000 private and public software/internet/IT services companies throughout North America, Europe, Asia-Pacific, Africa and Israel

• Clients span virtually every software technology, product category and vertical market

• Staff includes skilled and experienced investment bankers with MBAs from the finest business schools; extraordinary software industry expertise; several with software / technology operational experience

• SEG’s Software Industry Equity Reports are now read in 64 countries by more than 20,000 public and private software company execs, VCs, private equity investors, investment bankers and service professionals

• For additional information and insight, download our research reports at: www.softwareequity.com/research_reports.aspx

About Our Firm


3SEG: Unmatched Expertise. Extraordinary Results.


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• Software Industry Update

• Public Software, SaaS and Internet Financial Performance

• Software, SaaS and Internet Mergers and Acquisitions

• Software Company Exit and Valuation Management and Timing

• Questions

Agenda: Key Topics


52010 Public Software Company Performance

• SEG SW Index returned 22% in 2010, outpacing the DOW (+11.0%), S&P 500 (+12.8%) and NASDAQ (+16.9%)

• Investors found relative comfort in the public software company financial model: 70% variable costs, substantial recurring revenue, minimal inventory and capital equipment, and little or no need for debt financing


6 SEG Software Index*: Today’s Key Performance Metrics

• Annual median valuation (EV/Revenue) highest since 2007

• TTM revenue growth markedly lower than 2008, but quarterly trends encouraging

• Median TTM EBITDA margin increased to 17.4%, highest since 2005

• Balance sheets remained healthy; record amounts of balance sheet cash

• Software company Debt / Equity ratio is significantly lower than the S&P 500: 25% vs. 42%

*SEG’s software industry tracking index of 161 U.S. traded public software companies

Measure 2008 2009 2010

EV/Revenue 1.9x 1.6x 2.3x

EV/EBITDA 12.0x 9.9x 12.4x

EV/Earnings 19.5x 19.2x 27.0x

Current Ratio 1.9 1.9 2.0

Cash & Eq ($M) $72.2 $80.3 $92.6

Gross Profit Margin 67.8% 67.5% 68.6%

EBITDA Margin 14.3% 16.7% 17.4%

Net Income Margin 7.4% 6.9% 7.3%

TTM Revenue Growth 14.0% 5.0% 4.4%

TTM Total Revenue ($M) $202.9 $240.2 $239.8

TTM Total EBITDA ($M) $27.1 $34.6 $35.6

Debt / Equity Ratio 26.3% 26.6% 24.6%

SEG - Software: Median Metrics

Measure 4Q09 1Q10 2Q10 3Q10 4Q10

EV/Revenue 2.0x 2.2x 2.2x 2.1x 2.6x

EV/EBITDA 12.9x 13.1x 12.0x 11.6x 13.6x

EV/Earnings 27.2x 27.4x 25.6x 23.7x 26.3x

Current Ratio 2.0 2.0 2.0 2.0 2.0

Cash & Eq ($M) $89.1 $94.6 $98.7 $101.3 $101.6

Gross Profit Margin 68.4% 68.6% 69.0% 69.0% 68.6%

EBITDA Margin 16.3% 16.9% 16.6% 17.6% 17.8%

Net Income Margin 5.9% 7.3% 8.5% 8.2% 7.9%

TTM Revenue Growth -1.6% -0.1% 1.0% 4.4% 8.2%

TTM Total Revenue ($M) $239.2 $239.0 $232.7 $228.0 $226.8

TTM Total EBITDA ($M) $32.2 $36.4 $35.4 $36.8 $35.2

Debt / Equity Ratio 25.5% 26.6% 21.6% 23.2% 25.4%

SEG - Software: Median Metrics


7 SEG Software Index: Key Performance Metrics By Category

Revenue Growth

EBITDA Growth

EBITDA Margin

YTD Stock

Return

4Q09 1Q10 2Q10 3Q10 4Q10 4Q09 1Q10 2Q10 3Q10 4Q104Q10

(TTM)4Q10 (TTM)

4Q10 (TTM)

2010

Database & File Management 2.1x 1.9x 1.9x 2.1x 2.7x 8.8x 9.1x 9.0x 9.1x 10.9x 6.1% 4.5% 22.6% 9.5%

Development Tools, Operating Systems & Application Testing Softw are

1.6x 1.9x 2.2x 2.0x 2.7x 14.0x 9.4x 9.4x 7.3x 8.4x 21.5% 24.3% 21.1% 13.3%

Enterprise Application Integration 1.4x 1.4x 1.5x 1.7x 2.4x 10.0x 9.8x 11.2x 13.0x 21.8x 16.9% 31.4% 13.1% 26.5%

Messaging, Conferencing & Communications 1.8x 1.8x 1.9x 1.6x 2.6x 11.0x 14.1x 13.6x 13.4x 22.4x 10.3% 40.2% 15.3% 16.5%

Netw orking & Connectivity 2.2x 2.4x 2.4x 2.3x 2.9x 13.6x 19.9x 17.1x 15.5x 19.6x 16.9% 31.6% 23.3% 46.4%

Security 3.5x 3.7x 3.9x 4.0x 3.8x 14.7x 15.1x 14.5x 12.9x 14.1x 11.8% 24.7% 20.3% 6.3%

Storage & Systems Management Softw are 2.4x 2.5x 2.5x 2.7x 3.1x 13.8x 11.8x 11.5x 11.0x 12.2x 11.2% 21.0% 20.0% 13.0%

Wireless 1.3x 1.7x 1.6x 1.1x 1.1x 15.3x 11.1x 13.9x 11.0x 15.2x 15.1% 6.4% 7.4% -9.4%

Median 2.3x 2.4x 2.3x 2.2x 2.7x 13.2x 12.6x 12.8x 11.0x 13.9x 14.5% 23.3% 19.6% 9.8%

Billing & Service Management 1.5x 2.2x 1.7x 1.4x 1.4x 7.4x 10.9x 8.4x 7.0x 6.7x 15.2% 10.0% 20.3% 0.5%

Business Intelligence 2.4x 2.3x 1.9x 2.0x 3.1x 12.8x 13.7x 13.8x 20.9x 25.6x 11.1% -24.2% 14.8% -7.9%

Content/Document Management 1.7x 2.0x 1.9x 1.7x 2.1x 7.4x 7.2x 8.2x 7.5x 8.1x 0.8% 11.7% 25.2% -1.6%

Customer Relationship Management, Marketing & Sales Softw are

0.6x 0.8x 1.0x 0.8x 0.8x 11.8x 11.4x 8.3x 15.4x 11.8x -2.7% -18.0% -9.1% -12.8%

Education & eLearning 2.2x 2.0x 1.6x 1.3x 1.3x 16.3x 14.0x 14.9x 12.8x 18.2x 9.4% 18.0% 13.0% -10.3%

Electronic Design Automation 1.4x 1.5x 1.6x 1.5x 1.9x 9.4x 21.3x 22.8x 26.4x 19.2x 5.5% 126.5% 8.4% 19.7%

Engineering, PLM & CAD/CAM Softw are 1.7x 1.8x 1.9x 2.1x 2.5x 12.4x 14.9x 14.5x 16.4x 16.7x 7.6% 57.3% 19.8% 25.6%

Enterprise Resource Planning 2.0x 2.0x 2.0x 2.0x 2.0x 10.2x 11.2x 10.8x 10.0x 12.2x 4.0% 0.4% 17.2% 6.2%

Entertainment 1.0x 1.0x 1.0x 0.9x 1.2x 7.2x 8.8x 6.0x 5.9x 6.3x -10.5% 7.4% 6.6% -20.2%

Financial Services Softw are 2.3x 2.5x 2.6x 2.2x 2.8x 10.1x 13.4x 8.8x 8.6x 10.0x 7.7% 18.4% 21.3% 10.2%

Healthcare 3.7x 2.8x 3.4x 3.4x 3.5x 16.0x 15.9x 15.5x 13.8x 17.3x 16.3% 10.8% 22.3% 3.1%

Multimedia, Graphics, Digital Media 2.6x 2.9x 2.7x 2.5x 3.3x 17.7x 18.2x 18.4x 13.7x 14.5x 6.4% 12.6% 16.6% -1.4%

Supply Chain Management & Logistics 1.6x 1.6x 1.8x 1.5x 1.8x 13.1x 13.1x 11.9x 9.3x 10.8x 5.4% -4.2% 11.2% -0.4%

Median 1.9x 2.0x 2.0x 2.0x 2.3x 12.2x 12.4x 11.8x 11.8x 13.0x 6.3% 12.1% 17.8% 4.3%

Application Software

Infrastructure Software

SEG - Software: Median Metrics by Category

Category

EV/Revenue EV/EBITDA


8 SEG SaaS Index: Today’s Key Performance Metrics

• In 2010, median SaaS company valuation (EV/Revenue) 57% higher than software industry overall (3.6x vs. 2.3x)

• Valuation premium over on-premise counterparts continues to decline (137% in 2007, 79% in 2008, 69% in 2009)

• After eleven consecutive quarters of declines, SaaS TTM revenue growth rates rose in 3Q10 and even more in 4Q10

• Profitability growing as SaaS market matures – EBITDA margins highest on record and Net Income margins reached positive territory for first time in 2Q10

Measure 2008 2009 2010

EV/Revenue 3.4x 2.7x 3.6x

EV/EBITDA 45.1x 31.5x 32.2x

EV/Earnings 70.7x 65.7x 80.9x

Current Ratio 1.6 1.6 1.7

Cash & Eq ($M) $73.9 $89.4 $84.4

Gross Profit Margin 66.8% 67.3% 68.0%

EBITDA Margin 5.3% 7.2% 9.6%

Net Income Margin -2.6% -2.0% 2.0%

TTM Revenue Growth 37.8% 22.4% 14.2%

TTM Total Revenue ($M) $112.2 $145.9 $160.2

TTM Total EBITDA ($M) $4.2 $9.9 $11.6

Debt / Equity Ratio 0.4% 1.8% 3.8%

SEG - SaaS: Median Metrics

Measure 4Q09 1Q10 2Q10 3Q10 4Q10

EV/Revenue 3.2x 3.4x 3.6x 3.1x 4.2x

EV/EBITDA 38.8x 33.1x 32.3x 30.8x 36.2x

EV/Earnings 95.2x 74.7x 81.6x 70.4x 93.2x

Current Ratio 1.4 1.9 1.5 1.9 1.8

Cash & Eq ($M) $76.5 $76.0 $79.1 $84.1 $90.4

Gross Profit Margin 67.2% 66.7% 66.9% 67.0% 67.4%

EBITDA Margin 7.2% 9.5% 9.5% 9.3% 9.7%

Net Income Margin -2.1% -0.6% 2.0% 1.4% 2.6%

TTM Revenue Growth 15.5% 12.5% 12.1% 13.0% 16.8%

TTM Total Revenue ($M) $143.4 $140.9 $149.6 $160.0 $172.4

TTM Total EBITDA ($M) $9.9 $11.8 $11.5 $11.9 $14.3

Debt / Equity Ratio 2.1% 1.6% 9.1% 3.3% 4.5%

SEG - SaaS: Median Metrics


9 SEG SaaS Index: Financial Performance Impact on Valuations

• EV/Revenue valuations tracked TTM Revenue growth until Q2 2009 when focus shifted to profitability

• Q4 2010 saw a shift back to TTM Revenue growth as EBITDA margins flatlined

5.5x

4.8x 4.7x

2.7x

1.9x

2.5x2.7x

3.1x3.4x

3.6x

3.1x

4.2x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Median EV/Revenue

TTM Revenue Growth

TTM EBITDA Margin

Median EV/Revenue TTM Revenue Growth TTM EBITDA Margin


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Source: Capital IQ

Historical M&A Activity: U.S. Software

• Following a sobering 2009, software M&A activity stabilized in 2010, returning to historically consistent levels of approximately 400 transactions per quarter

• A moderate number of mega-deals, which were relatively non-existent in 2009, helped to buoy total dollars spent in 2010

• Example 2010 mega-deals:

• 3Q10’s $6.9EV billion purchase of McAfee by Intel

• 2Q10’s $5.4EV billion purchase of Sybase by SAP

470

518

478

402 345316 311

330 372

431

385402

368

0

100

200

300

400

500

600

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

# of Deals

$22.4$23.5

$14.9

$9.8 $6.3

$2.9$3.3

$13.5

$7.6

$4.6

$17.0

$19.1

$11.2

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

($ billions)


11Software M&A Valuations: TTM Revenue

• The median software industry exit valuation (multiple of trailing twelve months revenue) rebounded extremely well in 2010

• Quarterly analysis is more instructive. Has a sustained recovery in M&A exit valuations begun?

3.0x

1.6x1.3x 1.4x

1.7x2.0x 2.0x 2.1x

1.9x 1.8x2.2x

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1.3x1.6x

2.0x 1.9x2.2x 2.1x

2.5x2.1x

Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010


12Software M&A Valuation by Product Category (TTM Revenue)

• Significant yearly shifts in product category median exit multiples every year

• Examples of shifting exit valuation product categories Dev Tools & IT Asset Mgmt 2.0x 2010 vs. 3.0x 2009 vs. 1.9x 2008 Healthcare Software 2.5x 2010 vs. 1.5x 2009 vs. 1.8x 2008 Other Verticals (A&D, Telco, etc.) 1.7x 2010 vs. 1.5x 2009 vs. 2.8x 2008

3.7x

3.1x2.8x 2.7x 2.6x 2.5x 2.5x

2.1x 2.1x 2.0x1.7x

1.2x

Security

CRM, Marketing &Sales

Engineering, PLM &CAD/CAM

Education &Computer Based

Training

Wireless

Healthcare

HR & WorkforceManagement

Enterprise ResourcePlanning

Database & FileManagement

Dev Tools & ITAsset Management

Other Verticals(A&D, Telco, Retail,

etc.)

Content/DocumentManagement


13Select 2010 SaaS M&A Transactions

Buyer Seller DateEnterprise

ValueSeller

Revenue EV/Rev

Callidus Softw are Inc. (Nasdaq:CALD) ForceLogix Technologies Inc., Substantially All Assets

12/23/2010 $3,750,000 - -

Law son Softw are Americas, Inc. Enw isen, Inc.* 12/17/2010 $75,000,000 $15,000,000 5.0x

Fairfax Media Ltd. (ASX:FXJ) TenderLink.com Pty Ltd. 12/13/2010 $16,160,000 - -

Tibco Softw are, Inc. (Nasdaq:TIBX) Loyalty Lab, Inc. 12/08/2010 $23,000,000 - -

j2 Global Communications, Inc. (Nasdaq:JCOM) Protus IP Solutions, Inc. 12/03/2010 $212,000,000 $72,000,000 3.0x

Bottomline Technologies (Nasdaq:EPAY) SMA Financial Ltd. 10/26/2010 $7,940,000 - -

Taleo Corp. (Nasdaq:TLEO) Learn.com, Inc.* 9/1/10 $125,000,000 $29,761,905 4.2x

Kenexa Corp. (Nasdaq:KNXA) Salary.com, Inc. 8/31/10 $74,100,000 $45,460,123 1.6x

CA Technologies (Nasdaq:CA) Arcot Systems, Inc. 8/30/10 $200,000,000 -

Roper Industries Inc. (NYSE:ROP) iTradeNetw ork, Inc.* 7/22/10 $525,000,000 $80,000,000 6.6x

SDL plc (LSE:SDL) Language Weaver, Inc. 7/15/10 $42,500,000 $12,212,644 3.5x

USU Softw are AG (XTRA:OSP2) Aspera GmbH Lizenzmanagement 7/1/10 $7,340,000 $4,993,197 1.5x

Google Inc. (Nasdaq:GOOG) ITA Softw are, Inc.* 7/1/10 $700,000,000 $125,000,000 5.6x

CDC Softw are Corporation (Nasdaq:CDCS) TradeBeam, Inc. 5/14/10 $18,850,000 - -

Hew itt Associates Inc. (NYSE:HEW) HRAdvance Enterprises, LP 5/5/10 $11,000,000 - -

SuccessFactors, Inc. (Nasdaq:SFSF) CubeTree, Inc. 5/3/10 $50,000,000 - -

Vocus Inc. (Nasdaq:VOCS) Data Presse SAS 4/16/10 $10,670,000 $4,600,000 2.3x

K3 Business Technology (AIM:KBT) DigiMIS 3/2/10 $3,180,000 - -

SuccessFactors (Nasdaq:SFSF) Inform Business Impact* 2/4/10 $40,500,000 $15,000,000 2.7x

*revenue estimate Median: 3.2x

• SaaS companies continue to receive a substantial premium compared to their perpetual license counterparts


142010 Software M&A Survey: The Buyers Speak

• SEG polled 188 of the largest North American software companies to ascertain M&A mindset for 2011

• Full results (11 questions) and detailed analysis published in our 2010 Annual Software Industry Equity Report

0 17%

1-2 40%

3-5 33%

6-10 7%

More than 10 3%

0 7%

1-2 41%

3-5 31%

6-10 17%

More than 10 3%

The same 40%

Less 0%

10% to 20% more 57%

21% to 30% more 3%

31% to 40% more 0%

Greater than 40% more 0%

What's your current view of valuations? How much would you expect to pay in 2011 for a company very similar to the one you acquired in 2010?

Response %

Software Equity Group's 2011 Software M&A Outlook Survey

Approximately how many software companies did you acquire in 2010? Response %

If you had to guess now, how many software companies do you anticipate acquiring in 2011? Response %


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The salability and exit valuation of a software company is a function of:

• Market adoption of the product category/subcategory (size of market and rate of adoption)

• The number, type and make/buy behavior of the product category/subcategory’s leaders

• The target software company’s execution: products, customers, financial performance and business model

• The synergy between the target software company and the larger product category/subcategory leaders – as perceived by the leaders/buyers

Software Company Salability and Exit Valuation

or, simply put

Market - size, stage and adoption rate

Buyers - their market view and response to market adoption

Targets - execution

Synergy - with Target, as perceived by Buyer


16I. Market AdoptionA

dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

012 24 36 48 60 72 84 96 108 120

Typical Market Adoption Curve

Enterprise Software (Examples: BI, CRM, T&A)

Market A

doption R

ate

Early Adopters

Majority Adopters

Late Adopters

l l l l l l l l l


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Typically, buyers place their bets during the exit premium period (typically the approximate time period between 20% and 50% adoption by the addressable market):

• Market pressure

• Street pressure

• Competitive pressure

• Opportunism

II. Buyer Response to Market AdoptionA

dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

Buyers Respond to Market AdoptionRate of market adoption / gradient incline often

determines make-buy

Market Adoption Curve

Exit Premium Period (36 months)


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Mar04: SAFLINK-Litronic (5.9x)

II. Buyer Response to Market Adoption: BuyA

dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

Accelerated Market Adoption: Heightened & Condensed Buyer M&A Activity

Example: Enterprise/network security software, 2004 - 2005



Steeper market adoption curves shorten the exit premium period as buyers are pressured to place their bets earlier.

May04: Symantec-Brightmail (12.5x)

Oct04: CA-Netegrity (4.3x)

Mar05: Altiris-Pedestal (16.1x)


19II. Buyer Response to Market Adoption: Buy or BuildA

dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

Long, Slow Market Adoption:

Little Urgency, Sporadic Buyer M&A Activity


In slow growing product categories and many vertical markets, buyers have time to develop internally and/or place their bets as they wish:

Buyer

Buyer

Buyer

MakeMake

No Exit Period Premium unless driven by changes in standards

practices or compliance


20III. Exit Timing: The ISV / TargetA

dd

ress

able

Mar

ket

Pen

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n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

“Are you telling me a 60% CAGR isn’t the most important driver of a strategic exit multiple?”

• Most ISVs equate rapid growth to highest exit valuation

• Few ISVs won’t consider exit during rapid growth except for TTM revenue multiples repugnant to most buyers

ISV growth rate outpacing market adoption

Market A

doption C

urve




dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

And what if, when you’re ready, there are few if any viable buyers remaining who might be interested?

• Number of buyers in the SEG Software Index has decreased from 332 in 1999 to 161 today

• Once buyers comprising the product category leaders place their bets, your exit prospects and valuation decline, often drastically

Market A

doption C

urve




dd

ress

able

Mar

ket

Pen

etra

tio

n (

%)

Months

100

90 –

80 –

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 l l l l l l l l l12 24 36 48 60 72 84 96 108 120

And what if the ISV isn’t able to sustain its growth and achieve the multiple?

• Very few ISVs sustain their 40% - 100% CAGR for more than three successive years

• Buyers pause more and pay less when ISVs stall or misstep:

ISV growth rate outpacing market adoption

Market A

doption C

urve


• Recession• IT spending cuts

• Target market downturn• Insufficient growth capital

• Development missteps/delays• Technology/platform shifts & changes

• Sales force performance• Competition: Sleeping giants awake

• Product category dissolution transition (e.g., EAI, Rapid App Dev Tool, BI, etc.)

• Shareholder-Investor differences


23

What Do Buyers Want?

Products and Technology Buyers acquire when they are convinced the ISV / Target:

• Significantly enhances or extends buyer’s current offering

• Has a compatible or highly desirable product, market focus, delivery model and/or product architecture

• Strong management and domain expertise increasingly important as well

IV. The Final Factor: Buyer – Target Products and Technology

1 2 3 4Products and technology: The target's products/technology are well executed, a great fit with us, and provide the strategic leverage we seek

63% 10% 20% 7%

Growth: The target is growing at a rate far greater than average, demonstrating strong market demand, and we think it's time to invest 7% 33% 47% 13%

Profitability: The target is highly profitable, the deal will be accretive, the financial risk is lower 10% 13% 27% 50%

Management and Operations: The target has deep domain expertise we need to acquire, a great team, proven performers 20% 43% 7% 30%

When selecting and valuing acquistiion targets, please rank the following four M&A drivers in order of importance (1 = most important, 4 = least important):

Ranking


24 The SEG Mentoring Program

As part of our informal mentoring program, we are currently guiding and advising some fifty software, SaaS, and Internet companies around the globe that are not yet exit candidates, but aspire to be in the next few years. We meet with them periodically, invite them to call whenever they’d like our opinion on an operational issue that might have exit implications later on, and we keep them apprised of M&A activity and financings in their product category. And the best news – we don’t charge for this mentoring advice. It’s complimentary. It’s our way of building value, and relationships.

We’re looking for a few more such relationships. We begin with an introductory phone call with companies interested in being mentored, followed by a more in-depth telephone conversation. We’ll then invite qualified candidates to meet personally with four or five members of our team at our San Diego office. During this three to four hour sit-down, we’ll discuss the current market, specifically as it relates to valuations, transactions and trends in your product category. We’ll assess the strengths and weakness of your financial performance, how that compares to other companies your size, and how that relates to buyer expectations. We’ll discuss your market strategy, sales strategy, sales team track record, pricing strategies, equity structure, and a wide array of other factors that can materially impact your salability and valuation down the road. We’re a terrific sounding board. We’ll give you an informed, honest and frank opinion – that’s what we’re known for. And we’ll offer informed and insightful observations, ideas and options based on 18 years of working with countless software, SaaS, and Internet companies worldwide.

If you run a profitable software, SaaS, or Internet company with 2010 revenue in excess of $10 million, and you’re interested in learning more about SEG’s complimentary, no obligation mentoring program, please contact Kris Beible at [email protected] or 858-509-2800.


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Software Equity Group, LLC12220 El Camino Real, Suite 320

San Diego, CA 92130858 509-2800

www.softwareequity.com

january 27, pre event workshop

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