Software licensing companies with high concentration of products and clients
March 05, 2025
by a searcher from Pontificia Universidad Catolica de Chile in Santiago, Región Metropolitana, Chile
Hi everyone, I'm new to searching and to SearchFunder as well, and I come in the hopes to learn from your experience and knowledge.
I'm starting a self funded search fund based in Santiago, Chile. I'm on the initial stages of the search, defining some parameters and creating a funnel of opportunities, and have already received what it looks as a very attractive opportunity. I know that one is not supposed to get too attached to the first opportunity, since more could come in the future, but I already knew of this business since I did a little bit (emphasys on little) of research on it as a reference to a possible venture I wanted to create myself.
The business' main activity is license reselling (80% of revenue) with high client concentration of products and clients (1 license accounts for 85% of revenue, while 5 clients account for 50% of revenue). Its EBITDA margins are around 12% in the last couple of years with very low debt.
I have no commercial experience, but do have strong financial foundations and foundational knowledge and some experience on the technologies (and related services) it sells. I believe that Digital Transformation is a growing industry (specially in Chile) and that there are many opportunities in the form of new products and services.
I come hoping to find guidance and advice on how to approach this opportunity, hopefully experience on how such a business would run, what should I expect, what are the usual problems or troubles associated to the industry, etc.
Any and all opinions, tips, comments, advice, etc. are welcome and wanted.
Thanks in advance for your time and help!
I'm starting a self funded search fund based in Santiago, Chile. I'm on the initial stages of the search, defining some parameters and creating a funnel of opportunities, and have already received what it looks as a very attractive opportunity. I know that one is not supposed to get too attached to the first opportunity, since more could come in the future, but I already knew of this business since I did a little bit (emphasys on little) of research on it as a reference to a possible venture I wanted to create myself.
The business' main activity is license reselling (80% of revenue) with high client concentration of products and clients (1 license accounts for 85% of revenue, while 5 clients account for 50% of revenue). Its EBITDA margins are around 12% in the last couple of years with very low debt.
I have no commercial experience, but do have strong financial foundations and foundational knowledge and some experience on the technologies (and related services) it sells. I believe that Digital Transformation is a growing industry (specially in Chile) and that there are many opportunities in the form of new products and services.
I come hoping to find guidance and advice on how to approach this opportunity, hopefully experience on how such a business would run, what should I expect, what are the usual problems or troubles associated to the industry, etc.
Any and all opinions, tips, comments, advice, etc. are welcome and wanted.
Thanks in advance for your time and help!
in New York, NY, USA
I've helped with companies with heavy concentrations.
Dm of you'd like a quality of earnings (financial due diligence) done for your company.
from Massachusetts Institute of Technology in Portland, OR, USA