For one, you need a business plan. Many eBusinesses founder at this point, because one or more of these key elements is missing. Problems most frequently arise in the execution of the vision. Many business plans outline multiple initiatives and possibilities, without prioritizing or starting with the most promising one. Others target the right plan, but the business team lacks the expertise to implement it.
Key shortcomings are likely to be in the areas of finance and marketing.
If your business plan gets you to the table, and the VCs are interested in you, the discussion will soon turn to valuation. For this negotiation, you can throw out most of the traditional valuation methods. Multiples of positive cash flow are not applicable, asset values are irrelevant, and public company multiples are out of sight. For many businesses, there is a modest revenue stream that may form a basis for discussion. With no hard and fast rules, valuations will often be based on subjective judgments, with the management team and the concept as key drivers.