Subject: RE: Charging the Charger
From: "Anderson, Kelly" <KAnderson@dentrix.com>
Date: Wed, 18 May 2005 14:11:13 -0600

 Wed, 18 May 2005 14:11:13 -0600
If you can demonstrate a probable return of 10x on your money, then you
can usually get a VC to pay attention. If, on the other hand, you can
only realize a non-leveraged, "work an hour, get a dollar" approach,
then it is VERY difficult to get a VC to give you the time of day.

Support services are generally not highly leveraged, therefore, it is a
tougher sale to a venture capitalist, unless you have a business model
that demonstrates just how you will leverage support in some way.

Software VCs are used to the model of "work an hour, collect a residual
revenue stream". This leveraged approach is far more attractive, and far
harder to realize in an open source world.

-Kelly

-----Original Message-----
From: Gregory (Grisha) Trubetskoy [mailto:grisha@ispol.com] 
Sent: Wednesday, May 18, 2005 2:01 PM
To: Anderson, Kelly
Cc: fsb@crynwr.com
Subject: RE: Charging the Charger


On Wed, 18 May 2005, Anderson, Kelly wrote:

> If on the other hand, I say "Hey, I have this idea for software that 
> will change the way people do X, and it will save Y kinds of people N 
> dollars so that their ROI is 7 months, and there are 350,000 Y people 
> out there and here's how I can reach them. Oh, and here are my 
> projected financials." then I'm going to get the money if the numbers 
> work and are believable.

What if the I in the ROI above is money not for the software, but for
support of the software, while the software itself is free - are you
still going to get the money?

Grisha







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