Use of stock options can be excessive. Stock valuations are generally high, which frequently results in extreme price volatility. Lastly, deep-pocketed hardware companies tend to intrude in the software space. Intense industry competition is a final, and recurring, concern for investors. One need only witness the notorious rivalry between Oracle s Larry Ellison and Microsoft s Bill Gates to understand this clash of business and egos.
Software programmers are a rare breed with tremendous entrepreneurial drive.
They also have the good fortune to be in an industry that requires little capital to start a company. Hence, once new firms reach sizable market presence, the newly wealthy brains often walk out the door to find something new and more challenging. Perhaps not, but there will be adequate rewards to those investors who make the right choices. All rights reserved.