Valuations of e-commerce businesses difficult
Dec 12, 2012 Missy Rogers
Business valuations have never been an easy undertaking, and the recent economic turbulence has exacerbated the issue substantially. However, investors and buyers should consider using a firm that specializes in business valuations to ensure the most optimal and fair agreements when making deals. Bloomberg recently warned of the e-commerce startup industry, which had experienced massive growth in recent years. According to the news provider, valuations of some of these companies are beginning to implode, which is a common danger for any rapidly trending industry, and investors and creditors will need to be especially cautious when dealing with e-commerce companies as a result. The source explained that the rapid increase in values of these businesses, which is fairly common, makes it difficult to fairly assess e-commerce startups. "I did not take the highest valuation offer and I also made sure that our investors all thought they were investing at a fair and appropriate valuation," an e-mail to Bloomberg from one investor explained. Investors and professionals in charge of making business valuations will need to be especially vigilant when approaching e-commerce startups in the coming years, as this industry will likely continue to experience massive growth.