Re: [WISPA] Wireless System Valuation
Tom DeReggi wrote: I've been argueing for YEARS, that revenue is way over rated as a method to evaluate a company's worth. There are so many other more important factors such as how much revenue will your company enable the buyer to obtain because they have your assets. How is that argument going? You must have learned by now that one buys another company to grow revenue and/or reduce costs in this space. There is no need to buy a company to access a market unless you have an exclusive in that market. Do you have an exclusive? Most WISPs don't, so in the end it all comes back to revenue. Forbes shared information about his sale. From all that I have heard it is a prototypical deal. On one side you have a motivated seller and on the other a motivated buyer who can both agree on a reasonable valuation formula based on hard metrics e.g. revenue, customers, etc. -Matt WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] Wireless System Valuation
Metcalfe's Law is N..squared On Fri, 2007-10-26 at 13:49 +, Ron Wallace wrote: To all, What is the best method for determining the value of a Wireless Internet System??? Ron Wallace Hahnron, Inc. 220 S. Jackson Dt. Addison, MI 49220 Phone: (517)547-8410 Mobile: (517)605-4542 e-mail: [EMAIL PROTECTED] [EMAIL PROTECTED] ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
RE: [WISPA] Wireless System Valuation
I would think that it might also be good to know the total number of potential customers that the wireless network footprint covers. A system that covers a potential of 100,000 customers/households would be worth a lot more than one which might only have a maximum of 5,000 households able to be reached. Thank You, Brian Webster www.wirelessmapping.com http://www.wirelessmapping.com -Original Message- From: David E. Smith [mailto:[EMAIL PROTECTED] Sent: Friday, October 26, 2007 11:26 AM To: WISPA General List Subject: Re: [WISPA] Wireless System Valuation Ron Wallace wrote: What is the best method for determining the value of a Wireless Internet System??? According to my college microeconomics professor, it's worth exactly what someone else pays for it. :) Are you looking at just hardware (which is pretty easily quantified), or at a system including active customers (and the obligation to continue providing service to them)? If you're buying a complete business (or at least a bunch of customers) it's normally valued as some multiple of monthly revenue. Depending on your local market conditions, I've heard WISPs valued anywhere from 5x to 12x that number. What, exactly, the number should be depends on those local conditions, what other competition is in the area, whether those customers are under any long-term contracts, the business' established reputation, and about a zillion other things. Sorry to be so very vague. David Smith MVN.net ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] Wireless System Valuation
Ron Wallace wrote: What is the best method for determining the value of a Wireless Internet System??? According to my college microeconomics professor, it's worth exactly what someone else pays for it. :) Are you looking at just hardware (which is pretty easily quantified), or at a system including active customers (and the obligation to continue providing service to them)? If you're buying a complete business (or at least a bunch of customers) it's normally valued as some multiple of monthly revenue. Depending on your local market conditions, I've heard WISPs valued anywhere from 5x to 12x that number. What, exactly, the number should be depends on those local conditions, what other competition is in the area, whether those customers are under any long-term contracts, the business' established reputation, and about a zillion other things. Sorry to be so very vague. David Smith MVN.net ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
RE: [WISPA] Wireless System Valuation
I'm in the final stages of selling my WISP and the valuation I set was one year gross plus cost of infrastructure outside of radio's. This includes land, leases and structures. It's a lot better for WISP's then it is for ISP's who are getting about 6 months gross income, period. It wasn't hard to find a buyer and they even commented that I was letting it go at a pretty low price, DAMN! I just didn't want to be the guy who says I have 500 customers so I want 1.2 Million, dream on. Forbes -Original Message- From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of Ron Wallace Sent: Friday, October 26, 2007 6:50 AM To: WISPA General List; [EMAIL PROTECTED]; [EMAIL PROTECTED]; [EMAIL PROTECTED] Subject: [WISPA] Wireless System Valuation To all, What is the best method for determining the value of a Wireless Internet System??? Ron Wallace Hahnron, Inc. 220 S. Jackson Dt. Addison, MI 49220 Phone: (517)547-8410 Mobile: (517)605-4542 e-mail: [EMAIL PROTECTED] [EMAIL PROTECTED] ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] Wireless System Valuation
Define system. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: Ron Wallace [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org; [EMAIL PROTECTED]; [EMAIL PROTECTED]; [EMAIL PROTECTED] Sent: Friday, October 26, 2007 9:49 AM Subject: [WISPA] Wireless System Valuation To all, What is the best method for determining the value of a Wireless Internet System??? Ron Wallace Hahnron, Inc. 220 S. Jackson Dt. Addison, MI 49220 Phone: (517)547-8410 Mobile: (517)605-4542 e-mail: [EMAIL PROTECTED] [EMAIL PROTECTED] ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/ -- No virus found in this incoming message. Checked by AVG Free Edition. Version: 7.5.488 / Virus Database: 269.15.5/1085 - Release Date: 10/22/2007 10:35 AM ** Join us at the WISPA Reception at 6:30 PM on October the 16th 2007 at ISPCON ** ** ISPCON Fall 2007 - October 16-18 - San Jose, CA www.ispcon.com ** ** THE INTERNET INDUSTRY EVENT ** ** FREE Exhibits and Events Pass available until August 31 ** ** Use Customer Code WSEMF7 when you register online at http://www.ispcon.com/register.php ** WISPA Wants You! Join today! http://signup.wispa.org/ WISPA Wireless List: wireless@wispa.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
Re: [WISPA] Wireless System Valuation
I agree market size is a factor, but it will not apply to all candidates. Time in business also matter. Actually longer in business works agaisnt you, when considering market size.. They ask... If there is so much potential market, after all these years, why don't you have it yet? Therefore bringing attention to the sellers weaknesses or worse doubt regarding market factors which could limit viabilty of business model. Some one in need gets a lower selling price, than someone that is capable of materializing market expectations. I've been argueing for YEARS, that revenue is way over rated as a method to evaluate a company's worth. There are so many other more important factors such as how much revenue will your company enable the buyer to obtain because they have your assets. The fiber companies do the same thing. They'll try and sell you Dark fiber alone at a higher price than (Metro GigE) Dark Fiber + Equipment + Managed Broadband Service. The reason is the value is perceived as what the most lucrative buyer prospect could do with the potential of the strand, not the value to you today specifically. The fear is that a small provider will buy the dark fiber cheap and resell it to a big player for a higher margin at still less than market price that could destroy the market, by selling super cheap. Even though a DF strand is less expensive to delvier than a Manage GIGE, teh Dark Fiber is valued at 80GBs or more, not as a peice of cable. Or so the Fiber sellers try to justify. WISPs could use the same principle to evaluate their infrastructure. If the WISP has the abilty to turn the market upside down (say GB Wireless), it will not be evaluated by just a WISP's revenue that may be under selling their services to survive in early stages, it may very well be evaluated based on what it is worth to the provider that could leverage the networks advatange the best, or more so the damage that could occur to the market if their biggest competitor got their hands on the asset. But with that said... You can't argue a WISP to be less valueable than what one comes up by using revenue as the method of measurement. If a WISP is vulnerable, it may come down to a revenue evaluation. A Buyer will start taking away point for everything they identify is a flaw, and the seller will start adding points for everything they think is a unique strategic advantage. If evaluating just equipment similar arguements apply. Standard accounting methods may render in place equipment worthless if it is depreciated. More so if it is a less than future generation product line that is in place. Everyone wants the latest and greatest for maximum potential. But at the same time, the seller can look at that equipment in place and evaluate it's worth as the revenue it generates. If I can put a $100 radio in palce and it generates me $1000 a month, its worth a $1000 amonth, it has nothing to do with the cost of the equipment. At minimum, its worth the equipment calcualted value + man hours required to isntall, and man hours to engineer where it needed to be installed. A lot of costs go into placing an antenna. Property owner negotiations for example, Site Surveys and engineering. These are all costs the buyer saves. The question comes up is... Can the buyer recreate it themselves? Such as if the seller is going bankrupt the buyer can jsut assume it at little charge, with a property owner eager to transfer the agreement. Where as if teh seller is well in operation health without urgency to sell, the only option may be to pay top dollar for the assets. Wireless operation is worth what someone is willing to pay for it. And how muchg they are willing to pay for it determines on how confident they are with the projected revenues they could make from it. The number one factor to determine a companies worth is your abilty to convey they value it has towards obtain future revenue, without uncertainty. Tom DeReggi RapidDSL Wireless, Inc IntAirNet- Fixed Wireless Broadband - Original Message - From: Brian Webster [EMAIL PROTECTED] To: WISPA General List wireless@wispa.org Sent: Friday, October 26, 2007 11:59 AM Subject: RE: [WISPA] Wireless System Valuation I would think that it might also be good to know the total number of potential customers that the wireless network footprint covers. A system that covers a potential of 100,000 customers/households would be worth a lot more than one which might only have a maximum of 5,000 households able to be reached. Thank You, Brian Webster www.wirelessmapping.com http://www.wirelessmapping.com -Original Message- From: David E. Smith [mailto:[EMAIL PROTECTED] Sent: Friday, October 26, 2007 11:26 AM To: WISPA General List Subject: Re: [WISPA] Wireless System Valuation Ron Wallace wrote: What is the best method for determining the value of a Wireless Internet System??? According to my college microeconomics professor
