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What's a Virtual Business Worth?

Traditional business-valuation tools don't work well online. As a result, problems arise if the owner wants to price an online business for sale. Book value rarely approximates real value without hard assets ' which many online firms don't carry. A value based on earnings or revenue can work ' if the firm has enough of a track record, through good years and bad, to make it reliable. <br>But a brick-and-mortar solution, the earnout, can solve this high-tech dilemma. In an earnout, a business-seller receives contingent payments based only on a business's profits in the hands of the buyer.

12 minute read November 29, 2004 at 09:28 AM
By
Stanley P. Jaskiewicz
What's a Virtual Business Worth?

Traditional business-valuation tools don't work well online. As a result, problems arise if the owner wants to price an online business for sale. Book value rarely approximates real value without hard assets ' which many online firms don't carry.

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