In news coming out of the startup community this week, it’s become clear that a huge number of startups & tech companies have a lot of concentrated risk through over-dependency on one bank, the Silicon Valley Bank. Its collapse has left the industry reeling, with over USD $175 billion in customer deposits now under the Federal Deposit Insurance Corporation’s control.
Many software products you probably use are also operating with short runways, due to significant dependence on hopes for future funding rounds, and increasing debt obligations. It seems increasingly risky in an environment of rising interest rates and spiralling debt servicing costs, in which VCs are cutting spending due to less inflow of funds, .
Avaza differs a lot from many business SaaS products. We are a 10 year old, profitable company with no debt, thanks to a scrupulous focus on sustainable business practices. We have no exposure to the Silicon Valley Bank. By choice we never took on venture capital or debt, so we could focus on our core mission of solving customer challenges. We are growing without huge marketing budgets, which we attribute to the successful outcomes of our customers.
If you were to look at the public financials of a lot of popular listed SaaS companies in the CRM, Project Management & Work Management space, you will often see incredible levels of spending on ads, administrative expenses and R&D that far exceed their revenues.
There are popular products losing $500 million per year, with less than 1 year of cash runway remaining, and published connections to the Silicon Valley Bank. Their VC funding & shareholder goodwill often demands growth at any cost.
But growth at what cost? How safe is your core business data in those products? Are you playing Russian Roulette with your valuable data assets? In the wake of the SVB collapse and economic uncertainty, this is certainly something to consider!
At Avaza, our core mission is to offer a top-notch solution to businesses for managing projects, scheduling resources, tracking time, and team collaboration, while helping business owners maintain a tight grip on project financials. We reaffirm our commitment to longterm, sustainable growth without compromising the security of our customers’ data assets.
