Wednesday, August 2, 2017

How Much is an Internet Business Worth?

How much is an Internet business worth?

The obvious answer is, "it depends". While PE ratios, enterprise value or another financial ratio are typical valuation methods, in the final analysis, it comes down to the number a qualified buyer is willing to pay. And that number is ultimately based on the value creation potential of the business or its underlying assets.

One of our clients is about to get that ultimate answer to the valuation question in a silent, absolute auction for their Internet business. (The founders have suspended operations for personal reasons so the transaction is being structured as an asset sale.)

Assets up for auction include a seasoned web address; a search optimized, enterprise level e-commerce website; related IP including registered trademarks, patterns, social media accounts, customer lists, and more.

The business generated about $250K in cumulative revenue with good gross margins demonstrating solid customer acceptance, well beyond a simple "proof of concept".

As the company's website developers we see significant value creation potential in these assets as a turn-key brand and marketing channel applicable to a wide range of performance oriented products. (Happy to share details if you're interested; just drop us a line.)

Precept is managing the auction process for the owners. The bidding closes at 4:00 pm EST on Friday August 11, 2017. By 4:01 pm that day, we'll have a definitive answer to the question: "How much is this Internet business worth?"

1 comment:

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