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

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 27:41 Current Market Trends and Shifts 30:55 Impact of Macro Trends on Field Services 35:17 Future of Field Services and Construction 36:03 Differences Between Construction and Service Businesses 37:03 The Role of Software in Construction and Service Industries 38:30 The Impact of Economic Climate and Labor Shortage on Software Adoption 40:30 The Aging Workforce and the Role of Software in Service Trades 43:19 Understanding Debt Funding in Business Transactions 47:07 Quick Fire Round Subscribe on Spotify:  https://open.spotify.com/show/3ZVkJ12FIqD39oqgj7Kcjq  Subscribe on Apple:  https://podcasts.apple.com/us/podcast/saasy-talk-unfiltered/id1709426070 Subscribe on YouTube:  https://www.youtube.com/@SaaSyTalkUnfiltered Subscribe on Linkedin: https://www.linkedin.com/company/saasy-talk-unfiltered Subscribe to our Newsletter: https://substack.com/@saasytalkunfiltered Visit our Website:  https://saasytalkunfiltered.transistor.fm/  Follow Ricky Sevta on Linkedin:  https://www.linkedin.com/in/rickysevta/ Follow Sean Diljore on Linkedin:  https://www.linkedin.com/in/seandiljore/