I've been asked to help work with a relatively new internet company which has done so well over the past 6 months since release that it is looking to expand. They need to raise some finance and to avoid getting ripped of they need some sort of approximate value put on there web business - I know this is extreamly difficult to do but any help you can give will be of use.
The situation is this:
There main revenue stream is by taking product requests on their site, which are then sent straight to another company who follow up the leads. They get a current commission of 10% per sale. Now they are sending so much business to this other company that they are thinking of just selling the products themselves - which make sense as they will get a higher profit per sale and also the repeat business.
They currently send this company $35,000 (fresh) leads per week which works out at approx $1.8 mill per year - although they are increasing the value of leads they send by 20% month. (Each order is worth approx $700).
The company sell approx 30% of all leads - which works out at approximately $550,000 per year.
The company that sells the product makes 25% on all sales. So at the current rate of site referrals the internet company is sending them business that is worth $550,000 per year to there turnover and $136,000 to their gross profit.
I know this is really hard to put a figure on company values, and even harder to put a value on internet companies, but can anyone give me a rough figure of what you would consider this internet company to be worth (considering the fact that it is still growing at 20% a month).
I'd be really grateful if anyone could give me some sound advise - I've really no idea about this but I've been asked to do some investigating.
Really appreciate any advice - sorry I can't give more info but I'm sure you will appreciate that its all confidential.