Software and web related businesses can use subscriptions to raise funds in lieu of debt or equity.
This is nice for you as sales allow you to pay for staff, servers etc, and it also allows you to add extra functionality as you grow.
As your functionality grows then you can get more sales, and so it goes.
For customers it makes them feel that they are not taking risk with the technology and they aren’t paying for the bill to pay for a service which they know you will be selling to others. It limits their exposure and if others pay for service improvements, then they will also get the benefit. They may even be willing to buy upgrades in the future too.
If you have a worldbeating idea that the venture capitalists will pay you millions for to grow then I couldn’t be happier for you. But for the rest of us in the mundane business world with a good idea, then subscriptions are a great way to raise funds.
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