IRCE 2011 Report: The market is healthy for retailers looking for capital

Now is a great time for online retailers to seek capital, Petsky Prunier’s managing partner Norm Colbert told attendees at the Financing Growth workshop at Internet Retailer’s Conference and Exhibition 2011 this week.

With about $60 billion in total merger and acquisition deals so far this year, the pace of deals is already ahead of the $54 billion transacted in 2010.  Additionally, about 46% of those deals involve e-commerce and digital media companies, he said. “The initial public offering market is starting to open and the acquisition market is big. It’s a good time to raise capital,” Colbert said.

He highlighted several important web retailer characteristics that can excite potential buyers and investors:

• Recognized market positioning

• High lifetime value of customers

•Revenue growth with profitability

• Complementary services like video and social media that make the business more successful

Colbert suggested that online retailers take a look at potential financiers’ track records and ensure that they have a clear understanding of the products retailers are selling. “The single best investor that you can go to is one that has made money and understands your business well,” he said.