Service Provider Spotlight: October 18, 2016

Private Equity: It’s Not Enough To Look at the Financial Valuation of a Company

By Priscilla Guevara, Business Development, Whispr Group

With this post, EisnerAmper‘s Alternative Investments Intelligence blog kicks off its new Service Provider Spotlight, a monthly entry featuring service providers. If you’re interested in being featured, please contact Elana Margulies Snyderman.

As we move through the digital age, online behavior and conversations can largely impact the reputation of a company, both B2B and B2C, and, more importantly, possibly tell a whole other story than the numbers will. Digital intelligence can largely support the due diligence process as you evaluate your investments at key stages of acquiring a target company, maintaining your portfolio and/or exiting an investment.

Digital intelligence can also help private equity managers during their due diligence process as they evaluate their investments. Here are just a few things firms should consider:

• Management and Key Stakeholders – Who are the main influencers for the products, services and industry; and what is being said online?
• Digital Analysis What is the reputation and perception of and online sentiment toward the company and its products/services?
• Conversation Impact – What topics are driving the conversation regarding the company and its products/services? What opportunities could be captured through these conversations?
• Competitive Analysis – How are the competitors performing online? what is the public opinion of their products/services?

It is inherent that private equity firms weigh in on these components during their digital due diligence process of their investments. The quicker they obtain and analyze their information, the more well-educated their investments will be.