Using these industry multiples, when one of our Ad Tech clients saves $150,000 on one staff position, they are adding $1,800,000 – $2,700,000 in Enterprise Value to their company.  A Private / SME Digital Agency can add $600,000 – $1,200,000 in Enterprise Value to their company by engaging just one of our digital marketing virtual staff. We have clients using 10 – 12 of our virtual staff on an ongoing basis, but, consider even a more modest situation in which an Ad Tech venture company engages just five of our virtual staff generating incremental EBITDA of at least $750,000 (5 x $150,000) per year.  Using the industry median EV/EBITDA multiple of 10X our client has increased their EV by $7,500,000.  A company using ten of our virtual staff can increase their EV by $15,000,000.

Think about this from the perspective of a venture investor. Consider a venture company that has ten US-based employees and ten offshore virtual staff provided by ExDigita. What does a venture investor see when he learns that half the people in the venture company he’s evaluating are offshore virtual staff costing 80% less than their comparable US counterparts? He sees:

• Savvy, cost-effective management
• Higher EBITDA
• Higher valuation
• Lower burn rate
• Longer runway
• Less risk of a (possibly dilutive) near-term round of financing
• More agile company that can quickly change headcount or skill sets 
• Likelihood of bringing product to market sooner
  
  

Savvy founders, C-level executives, and venture investors know that engaging virtual staff has relatively little risk and increases the probability of success.  The risk-adjusted ROI of using virtual staff is unparalleled for creating incremental company value.

Think about the ultimate impact this significant value creation can have on a company. For most venture companies, the ultimate objective is to have a successful exit event to earn big payouts for investors and employees. But very few companies achieve successful exits, and few investors and employees realize their ultimate objective in investing in or joining a company. Consider what might have happened had all the failed venture companies used virtual staff as a significant portion of their overall staffing. Assume a company in the US or other high-cost country had engaged virtual staff for ten positions. A company could have saved $1,500,000 in operating expenses annually, and $15,000,000 over ten years. These cost savings could have been invested in more product development, more marketing, more technology licensing, business development deals, etc. 

Here’s an interesting irony: companies can use money saved by using offshore virtual staff to make key hires, including senior executives that a company might not otherwise be able to afford. Company management should consider that the annual cost savings from using offshore virtual staff can potentially cover the cost of hiring key C-level executives or advisors.

One common reason why most startups never achieve their desired exit is that they burn through their cash too quickly and often fail to get additional funding. What if by using virtual staff they could gain an extra year or two to develop and market their product? Or maybe a company has failed to demonstrate a clear path to profitability, thus, making it unattractive for further investment, as an acquisition target, or as an IPO candidate. Using virtual staff can help companies radically alter their cost structure and projected profitability to the point that it can be a factor in making them an attractive candidate for additional financing, acquisition, or an IPO.

Some company founders and investors have a more traditional objective than achieving a successful “exit”. Their primary objective is to build a successful, sustainable, profitable business. The probability of achieving this objective is greatly increased by prudently leveraging offshore business process outsourcing and virtual staffing.

I’ve been working in the online venture ecosystem since the late 1990’s.  My own experiences as a serial tech venture entrepreneur inspired me to help start a BPO / virtual staffing business that could help tech venture founders’ chances of fulfilling their entrepreneurial dreams. I’ve seen the profoundly positive impact offshore business process outsourcing and virtual staffing can have for both startups and for more established companies.  

In fact, an extraordinarily high proportion of our clients have been acquired, and I don’ think this is merely a coincidence.  

I encourage company executives to fully leverage the power of offshore business process outsourcing and virtual staffing to help their companies grow, succeed, and achieve their ultimate objectives.