Enterprise Valuation, Risk, and the Modern E-Business

The following paper comprises three key parts, each drawing on those previous and, ultimately, culminating with a novel solution to the problem of valuating e-commerce startups. Because the text moves quickly from one aspect to another, a short overview may enable the reader to more clearly discern the value of each element, in combination, to the ultimate goal. First, analysis begins with an introduction of the difficulties present in valuation of e-commerce firms. The first portion of the text also introduces common risk factors within the e-commerce space, a concept which is critical to the subsequent developments. Next, the text delves into the methods applied to valuate technology startups, making note of the models applied. Further analysis of these methods examines the intricacies of the solutions posed and the difficulties found in application. Finally, the author presents a novel method of ascertaining the market risk of e-commerce startups. This proposition relies on the assumptions developed in the first portion of the text and contributes to bringing the methods identified in the second closer to fruition. Because the novel method could allow for valuation of e-commerce firms if applied by way of previous theory, the proposed solution may prove useful in the valuative exercise.