I have a question about....

[mlauriat]

How does a person establish the value of their web-site for re-sale or to have other people invest in it? I am not totally clear as to how that is done and I am thinking of selling off a portion to a private investor. I don't want to present it as a total gamble (cute pun). I want to present it in a purely logical business practical way and I have never dealt with this type of business before so I have no knowledge whatsoever.

Please throw some great ideas or experiences this way.

Thanks so much.

[AmCan]

Basically, the value of a gaming portal is mainly based on it's revenues, traffic and it's rank for certain keywords. The trend, whether increasing or decreasing, is also important. Over the years the price range on sites based on revenues have sold in a range from 3 months to 12 months revenues.

If you're looking for an investor, for a small business you want to expand, i suggest you

1) Gather stats for 2009, note whether or not the revenues/traffic is growing or shrinking.

2) Decide how much investment you need.

3) project how the investment will pay off. For example "in 24 months we'll double/triple revenues and have profit margin of X%.

4) Since this is a high risk investment (all new businesses are) and assume the investor will want to see at least a 10% annual return on the investment. So if the investor invests $10,000, they'll want to see a payment of $1000 per year.

5. Calculate what percentage of your projected profits the $1000 dividend requires and that is the minimum percentage to offer. If you expect to have profits of $10,000 then you need to give the investor at least 10%. If your current numbers aren't too good and your projections rely on a lot of hope, you'll want to offer up a larger percentage.

In general you need to keep 50% + 1 shares to keep control, but i suggest that you try to limit an investor to 40% of the shares and 1/3 of the board seats (keep the board to 3, you, the investor and someone you trust to support you).

just a few ideas, i hope this helps.

[mlauriat]

Thank you so much AmCan, that totally lays it out in a very logical sequence and it makes total sense. Wish me luck, LOL.

As ever