What ecommerce questions should an investment committee ask before closing?
Answer: An investment committee should focus on the ecommerce assumptions capable of changing underwriting: how attractive channel contribution really is, how dependent growth is on marketplaces and paid media, how much working capital is required, whether inventory and channel control are healthy, and whether the operating system will transfer cleanly to a new owner. The committee does not need tactical marketplace detail. It needs evidence that forecast growth, margin expansion and exit assumptions remain credible after the major ecommerce dependencies are made explicit.
Why this matters
Ecommerce can materially change both upside and downside while remaining underexplored in conventional commercial and financial diligence.
What the board should examine
- Quality of channel contribution
- Platform and customer concentration
- Paid-demand dependency
- Inventory and cash needs
- Channel-control risks
- Key-person and transferability risk
- First 100-day implications
What good looks like
The investment case states the major ecommerce assumptions explicitly, diligence tests them with evidence, and the value-creation plan assigns actions to any material weaknesses identified before close.
Related questions
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