Tech Industry Metrics Support Investments in Private Equity: 2013 Best-in-Class Digital Solutions
Emerging companies and startups, particularly in the technology industry, have the potential to yield high returns to their investors. Knowing which emerging company to invest in is the tricky part, since not being traded on NASDEQ means that privately-held technology firms are under no obligation to balance their books publicly. Without this type of public disclosure, investors evaluate the potential of emerging businesses using any information they can, including annual earnings and information provided by the companies themselves. Corporate finance lawyer, David Ellison, says “Most private start-ups in search of capital attempt to solicit potential investors with hype that they have created the latest and greatest technology.” The combination of no information and misinformation makes acquiring private equity potentially a high-risk endeavor.
Relying on the annual evaluation metrics of tech-industry authorities like Website Magazine can shed light on which privately-held firms are worth investing in. Website Magazine named the top 50 digital solutions of 2013 late last week.
While NASDEQ companies like Facebook (NASDEQ: FB) and Salesforce (NASDEQ: CRM) dominated the more obvious categories, it was the up-and-coming rising stars of the industry categories that will be the digital solutions to watch in 2014. Companies like SLI-Systems (Private: SLISYSP) and iPerceptions (Private: IPERCP) were among others in the top Experience Solutions category. inMobi (Private: INMOBIP) is leading the way in mobile advertising solutions, while less obvious platforms like BrightEdge (Private: BRIEDGP) outcompeted industry giants like Moz (Private: SEOMOZP) for the best in SEO.
Companies were awarded best-in-class based on consistent leadership in their category and included metrics such as advertising, software, social media and more. Knowing which companies are consistently ranked and recognized, in addition to which companies are new to the playing field, will help investors uncover lower-risk opportunities among emerging businesses.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.