This type of growth strategy in private equity land has been gaining acceptance and steam over the last decade. The platforms backed by the private equity funds often pay a “strategic” value, while moving at the speed of private equity. This is extremely attractive to sellers seeking a fair valuation in a reasonable timeframe. Based on our real-time transaction experience, private equity funds are even more hungry for add-ons, even in today’s pandemic environment. Entrepreneurs and executives who are considering a sale transaction, should strongly consider the advantages of selling to a private equity backed platform.

Over the past decade, companies like Apple and Microsoft have consistently been amongst the most valuable companies globally. The ascendance of these Big Tech companies has sparked concerns of whether some have become “too big to fail,” as were Wall Street banks during the 2008 Financial Crisis. Meanwhile, the SaaS revolution brought software onto the cloud, powered mainly by Big Tech. In particular, Amazon’s AWS has a commanding lead as a cloud service provider. We explore the cloud economy’s growing dependency on AWS, while at the company level, the use of AWS is often used as part of a multicloud strategy. However, this strategy does not necessarily lead to enhanced cloud resiliency. Outages will continue to result in steep financial losses unless there is a stronger focus on storing the same data across multiple servers ie. cloud redundancy.

With mounting concerns of a Covid-19 “second wave,” SaaS companies like SalesForce, Shopify and Workday are poised to benefit as companies extend their work-from-home policies. These SaaS / mission-critical software service firms provide cloud-based solutions for employees to operate efficiently in the safety of their homes. Google has already allowed most employees to work remotely through the rest of the year, with Twitter and Facebook choosing to do so permanently. As the rest of the economy transitions to digital workplaces, business processes will be adapted to SaaS platforms and will be increasingly integrated, streamlined and automated. The long-term subscription revenue of these SaaS companies is expected to keep pushing up their valuations this year.

In March, the Paycheck Protection Program (PPP) was initiated to provide loans to small businesses, as part of the comprehensive coronavirus stimulus bill (CARES Act). Through this program, $660 billion was authorized to support business owners keep up their payroll and other operating expenses. However, the scale of the program and lack of borrower scrutiny has attracted numerous fraudsters, including a NYC resident who was charged with a $20 million PPP and SBA loan fraud. In this report, we highlight fraud strategies such as “loan stacking” and the use of FinTech to address these problems.

Investment banks that conduct complicated M&A and capital raise transactions are notoriously resistant to deploying technology in their operations. This attitude affects larger investment banks down to the one-man firms advising on transactions, since the transactions are high-impact and there is not any room for error (i.e. highly risk adverse). Migrating these organizations to a 21st century technology stack will result in bankers to dispensing strong advice. Alex Koles, CEO of Evolve Capital, spoke with Federico Baradello, the CEO of Finalis , a VC-backed software driven firm enabling investment banks to operate, in the cloud, all aspects of a transaction.