Making Money in Technology
After the Bubble, page 24
Triage: Understanding What Is Worth Saving
In the current climate, many technology investment opportunities involve what is essentially a triage
evaluation: can the patient be saved?
In the business context, the question actually is, is the business worth saving? What parts of the
operation have value?
You’ll need to understand how to make this assessment if you are making the call of whether to
continue operations or to shut a company down. You also need to understand the value of a company
if you are attempting a sale (of assets, or in whole).
Any successful consolidation or merger play is dependent on understanding what in the operation
has value—and what doesn’t.
Obviously, the value of a technology start-up does not consist of real estate and other hard assets.
In fact, there may be essentially no tangible assets.
In fact, there are only three areas that may have value in a technology company:
Of these, customers and sales traction is the most easily evaluated. It’s best to start by talking to
the customers. You can also have a look at documentation such as sales contracts, letters of intent, etc.
Continued next page
Page
21 |
22 |
23 |
24 |
25 |
26 |
27 |
28 |
29 |
30 |
More |
Beginning
|
