Not good. How to spot a GREAT ISV Business

So – trust-fund, pension or 401k. My money needs to grow! I want to own a software/IT business. Idea? Great! “How-to” is unclear, but read this and learn. The following points are how I asses a business model and evaluate the potential of the ISV. The steps are simple and gives you a clear indication either to open the wallet or stuff it away, and I have shared this model with BC’s and VC’s for help them understand the ISV’s in detail.

  1. Seeing is believing. The ISV focus on selling their solution and front customers every day. The ISV actively has employees only focused on sales & marketing!
  2. Top-Down approach. The ISV made the business by focusing on óne big customer, to pay for the whole development of the first software release. This will tell you that the ISV understands the value of capital, sales and a reference in terms of case. The ISV will not burn your money with a five year development plan for a product, never to be released.
  3. Cash is king. The ISV understand that it is a capital game. invoicing and billing customers is part of the company DNA. Ask around their procedures in billing!
  4. The ISV operates from industry and business knowledge with a specific area or part, solving a real business pain, with a clear impact on the business economy and value.
  5. The ISV has little or simply now competitors with a similar business model. The ISV can have a disruptive business model (same business value for at least 1/6th of the price)
  6. The ISV extends or operates on existing technology, and does not try to invent everything from stretch.
  7. The ISV has a potential of a partner channel, distribution channel or affiliate channel.
  8. The ISV can bring consultancy and/or additional revenue streams with their software.
  9. Software+Services or SaaS is part of the future or existing plans of the software. Either the solution is built from stretch to SaaS or the ISV have already assessed their opportunity within the Cloud Community.
  10. The ISV build the software on a proven technology stack. This will help the organization with external support and lower implementation of new-hires.

A lot of other factor plays a role. Your stomach for instance! But you have to have an acquisition model you will follow.