That’s interesting and sounds positive you had autonomy.
Did they have an expected return on investment and just use your existing planned earnings growth? If they didn’t change your earnings slope, did they have a timeframe in mind for the multiple they used to buy you?
For example, if you earned $1 in the year of purchase and $.50 the year before and projected $2,3,4,5 in the next four years; did they use this for your purchase price? Or did they project some efficiency that shifted your projections to $3,4,5,6 and used that for the purchase valuation?
Our company had just transitioned from social networking to social commerce, and was starting to build out features like a shopping cart, product listings, etc. So the valuation was mostly hand-waiving based on the fact that we were the most recognized e-commerce brand in the region, despite not really being an e-commerce business yet.
We were doing about half a billion in annual GMV but none of it monetized yet.
Did they have an expected return on investment and just use your existing planned earnings growth? If they didn’t change your earnings slope, did they have a timeframe in mind for the multiple they used to buy you?
For example, if you earned $1 in the year of purchase and $.50 the year before and projected $2,3,4,5 in the next four years; did they use this for your purchase price? Or did they project some efficiency that shifted your projections to $3,4,5,6 and used that for the purchase valuation?
Only if you’re able to discuss, obviously.