A blueprint to exogeneous growth for small and medium B2B software firms

Edouard Ribes ()
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Edouard Ribes: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: To survive & to strive, small B2B software firms need to reach a minimal efficient size. This phase of growth usually entails merging with and/or acquiring other business. This position paper provides a quick overview of the core drivers determining the value behind such an operation. The article is designed for entrepreneurs. It articulates simple theoretical concepts stemming from Penrose's resources based view of the firm with notions of transaction economics. It illustrates them with simple examples on mono product/mono markets software firms. The article thus provides a simple explanation of the current valuation multiples for software firms which can be currently seen on the market place.

Keywords: Firm performance; Growth; Entrepreneurship; Software services; Mergers; Acquisitions (search for similar items in EconPapers)
Date: 2023-08-01
Note: View the original document on HAL open archive server: https://hal.science/hal-04177864v1
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