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Differentiating Technology from Traditional Buyouts
The key difference lies in the skill set required to manage services companies and conduct acquisitions in the technology sector compared to software engineering-heavy startup teams. Traditional buyouts involved adding a thin layer of software to companies to market them as tech companies and leverage tech valuations for cheaper acquisitions. However, this approach often resulted in early investors and founders benefiting while late investors and employees suffered as the market recognized the true nature of the acquisitions. In contrast, the current approach focuses on leveraging technology in a substantive way rather than just superficially adding software.