There are two primary ways to build a $10M Software business. In this example, we are assuming that the two models are valued equally with a 10X multiple on yearly revenue.

The first is to have 833 customers paying $100 per month, or $1200 per year, for a license.

The second is to have 308 customers paying $100 per month for software, with an additional $80 per month in payment processing margin, $40 per month in payroll, and $30 per month in banking. This would total $3,240 per year per customer.

Each of these models has its own advantages. The first model is more straightforward but requires significantly more customers to generate the same amount of revenue. However, the second model has the potential to generate significantly more revenue through Embedded Finance – by offering financial services like payroll and lending alongside the software product. This can also significantly increase the multiple because revenue can be recognized as top-line revenue.

This can be a powerful way to differentiate the product and drive adoption. Ultimately, which model is more successful will depend on the specific circumstances of the business and the priorities of its development roadmap.