SaaS and Venture Capital Trends
Montreal is a city with a fast-growing tech sector, the high-quality but low-cost education system drawing and producing a rich assortment of talent. Already boasting a host of popular startup forums, the city’s robust infrastructure provides further support to innovative go-getters and entrepreneurs, and with increasing global investment flowing into the city, it’s clear the rest of the world is taking note. CloudTweaks spoke to Stephane Manos, VP of Montreal-based and pioneering acquisition firm Valsoft, for a refreshingly unique perspective on the benefits of SaaS and venture capital trends in the sector.
Why Valsoft Keeps the Companies They Acquire Forever
In a world where venture capitalists tend to make decisions based on the prospect of buying a company cheap and selling it for massive gains a few short years down the line, Valsoft instead specializes in the acquisition and operations of vertical market software businesses that it intends to keep on its books forever. “Knowing that we won’t sell a company three or five years down the line gives us a different kind of discipline,” explains Manos. “We invest ourselves in a venture only if we believe that a company will exist and thrive for ten to twenty years into the future.”
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Turning the tables on the buy-to-sell approach of many investors, Manos advocates a philosophy which distinguishes Valsoft in the acquisition market. He approaches every purchase with an intimate understanding that every company is the life work of its founder, embodying his or her dreams. Employees are often more like a family, and customers may have been using an organization’s solutions for years. “We strive to be friendly buyers. We do our best to nurture the culture that brought a promising company to the point where it’s become attractive to us,” explains Manos. “We understand that preserving the legacy of the owner has a level of importance on the totem pole, and we pride ourselves on living up to the promises we make during the negotiation stages. Promising things just to get a deal done is not part of our culture.”
Those on the outside tend to view entrepreneurial and owner-managed enterprises with rose-tinted glasses. Choose your own hours, work for your passion, make lots and lots of money. But any proficient business leader knows that building and managing an enterprise, never mind a successful one, is a stress-filled, life-consuming process with high risks and little support. Understanding these challenges, Valsoft’s expertise delivers an immediate impact on businesses by implementing measures that improve the bottom line and maintain a positive cash flow, which the venture can use to fuel its own growth.
Many of the organizations Valsoft acquires predominantly make use of on-premise computing solutions with some cloud-based services, but Manos recognizes the market’s desire for cloud computing and billing solutions, affording both agility and reduced costs. To this end, Valsoft intends to bring acquisitions onto the cloud via development or business partners. Manos has made it his mission to position Valsoft as the kind of tech company that potential vendors perceive as a perfect destination for the companies they started. “We want entrepreneurs who are considering an exit or a growth strategy to see us as a partner that will continue to invest in their people and in creating opportunities in which they can thrive, either organically or through additional acquisitions,” explains Manos.
Success – But Not at Any Cost
In a challenging economic climate with constantly evolving tech requirements, many founders feel forced to take drastic measures or burn out before realizing the full potential of their enterprises. Finding and accessing the supportive networks and communities that sustain innovators can be challenging, but as hubs such as Montreal’s advance, we see a rise in resilient businesses. Manos is one contributor who has found personal fulfillment and success in creating permanent, solid homes for vertical market software ventures, encouraging them to reach their potential and become major players in their niches. “Only when you buy a company with the intent to keep it forever can the sky become the limit,” maintains Manos.
(Sponsored feature by Valsoft)
By Jennifer Klostermann