There’s been a lot of buzz alongside Facebook investors later they announced lackluster results for their showtime quarter every bit a world company. Shares sank 10% inwards later hours trading signaling that earth is getting less patient later the social network giant posted meshing losses of $157 million. Zynga plunged 40% later announcing results a twenty-four threescore minutes menses earlier, in addition to later Facebook’s quarterly results were announced, the social gaming fellowship was hitting fifty-fifty more.
Consumers are fickle. Building a concern based on consumer behaviour is risky, the original argue consumer companies tin grow quickly, only thence sense unpredictable performance. We looked at b2c in addition to b2b companies later going public, in addition to the information supports this stance (our analysis included all tech IPO since 2004 who had 1 twelvemonth or to a greater extent than of aftermarket surgical procedure past times 12/31/11). SaaS companies sense the highest consistency later going public, piece other concern models are less predictable.
The distribution of increment for each sector is shown below. Less than 10% of SaaS companies convey seen declines since their IPO, piece 67% of Consumer Internet companies are valued below their IPO price.
This is the cardinal driver for our focused strategy. Since the founding of Emergence Capital Partners, nosotros convey focused entirely on SaaS in addition to Technology Enabled Services businesses. With focus, nosotros convey a deeper agreement of cardinal metrics in addition to best practices in addition to a unique network of executives inside our sector. We convey partnered with roughly rattling potent entrepreneurs in addition to convey been rewarded past times the success of roughly keen companies such every bit Salesforce, Success Factors, Echosign in addition to Yammer. Despite the majuscule consumer meshing companies are attracting, nosotros firmly believe nosotros volition generate to a greater extent than consistent returns for our investors in addition to entrepreneurs past times continuing to focus on this category.
