Who sets your software partner's growth targets?
Outside capital is good for plenty of companies. When your software development partner takes it, someone who is not you starts setting their growth targets.
Most companies should take outside money at some point. Venture capital and private equity have built a lot of good businesses. Outside capital buys runway, real benefits, a finance function that works, the ability to survive a bad quarter, and the standing to say yes to a contract three times larger than anything you have done before. A good number of our own clients are venture-backed or sponsor-owned, and for them it was the right call.
The firm you hire to build your product is the exception. Not because capital corrupts anyone, but because of a structural fact that is easy to miss when you are comparing two nice-looking proposals: when a software development partner takes outside money, someone who is not you starts setting their growth targets.
Growth has to come from somewhere
An independent services firm grows when its clients are happy enough to come back, and happy enough to introduce it to someone they respect. That is a slow engine and a fussy one. It turns only when the work is good.
A firm with a sponsor has a second engine, and the second engine comes with a number attached, and a date. Revenue has to compound at a rate somebody modeled in a spreadsheet before you were ever a client. Headcount has to be productive. Practices have to be cross-sold. None of that is dishonest, and none of it means the work will be bad. It means there is now a set of pressures inside the room that did not come from you, and you are downstream of them.
What that feels like from your side of the table
The tell is never a bad quarter. It is a series of small things that each have a reasonable explanation:
- The people who pitched you are not the people who build it. You met the principals. You got a team assembled from whoever was rolling off something else.
- Utilization is a target, and your project is where it gets hit. An idle engineer is a cost line. When a firm needs the bench working, the person available and the person you needed stop being the same person.
- The cross-sell shows up around month four. Have you considered our data practice? Our AI practice? The question is rarely wrong on the merits. It is just being asked for a reason that is not yours.
- The contract runs longer than the work. Client churn destroys a valuation multiple, so retention gets engineered into the paperwork rather than earned in the delivery.
- An integration lands mid-engagement. New processes, new tooling, a new reporting line, two merged firms figuring each other out while your roadmap sits and waits.
Nobody has to behave badly for any of this to happen. It is what the incentives quietly ask for, and incentives are patient.
The obvious objection
Independent firms can be thin. Capital buys resilience, and a firm without it funds its own bad quarter out of the same pocket that pays your team. That is a fair thing to worry about, and you should ask about it.
We are also not going to promise you that we will never take outside money. That is exactly the kind of promise that ages badly, and you should be suspicious of anyone who makes it. Ownership can change. What you can actually evaluate is what a firm is structurally accountable to right now, and whether you can check it yourself.
What we are accountable to instead
85% of our new work comes from referrals. That is not a brag, it is a constraint. It means the only mechanism by which Tarmac gets bigger is the last team we sent being good enough that someone spent their own credibility introducing us to the next client. There is no outbound engine underneath that to pick up the slack.
We do not run a junior tier. Engineers average ten years, and the person who scopes your feature is the person who ships it. There is no pyramid that needs feeding, so there is no quiet pressure to put someone cheap on your project and call it leverage.
They also stay. Our engineer retention has run above 96% for the last two years, which is the only honest basis on which any firm can tell you that the team you meet is the team you keep. Everyone says it. Ask them for the number.
Engagements run six months, cancellable on thirty days’ notice. A team you can let go every month cannot coast. That clause exists to remove our own ability to take you for granted.
Five questions to ask any software development partner
Ask us too. We would answer all five in a first call.
- Who owns you, and has that changed in the last two years?
- How much of your new business comes from referrals, and how much from outbound sales?
- Name the people who will be on my team. Will they still be here in six months, and what is your engineer turnover?
- What is your notice period, and what happens if I want out at month three?
- What are your utilization targets, and who sets them?
The last one is the one that matters. There is no comfortable answer if the number was handed down by someone with a board seat and a timeline.
A good partner will not flinch at any of it. Ours is the Tarmac 10: the ten practices we hold ourselves to on every engagement, written down so you can hold us to them too.