RE:RE:RE:Challenges to Valuing Venzee Potential
Great posts, All. Thank you.
RealVal - my valuation is in close proxy to yours in terms of ARR and multiples. Like you said, we're just working with what's available. Thanks for the SAM and SOM terms as well.
MidTown - I remember John addressing the volume of opportunities in the 3-5yr range and agree with what you said about him not wanting to speculate at the size of the prize.
In the investor deck there is an Opportunities/Sales Pipeline number at YE 2021 of 10k with expected growth to 20k by EOY 2022. This at least gives some insight into what's VENZ feels is out there in terms of their SOM.
I wonder what a ballpark 'close rate' on these sales opportunities would be? I'd be speculating here, but if they can close 15-20% of these opportunities that would continue to drive solid growth towards YE targets. VENZ may also have a quick run up initially in sales, followed by a peak and plateau as they capture more market share. Simply dividing the exit connections into the sales pipeline numbers would get us to 21%, 25%, and 37% 'close rates' as the year progresses. 20% seems reasonable, 37% seems a bit high.
This is also assuming each sales opportunity equals one Mesh Connector sale. If retailers purchase in bulk then the 'close rate' is a different story. We obviously don't know how these deals progress and how the volume of Mesh Connector sales is agreed upon.
Again, complete speculation on my part and I welcome any comments/suggestions.