Deal Maker University
Scott’s panel was asked to discuss changes in deal making in 2023 and expected in 2024. Some points raised and issues discussed included:
5 Tips to Increase the Value of a Private Business
Even a small amount of sustainable annual growth, such as 10%, can more than double the multiple paid for your business.
Venture Capital Valuation
Venture Capital investing is a portfolio game – you don’t just make one good deal. Rather, VC firms invest in several companies to spread out the risk. They know that eight or nine out of 10 investments will fail or bump along and return no real gain, while one or two might be a success.
EBITDA is Pre Debt Service
EBITDA times a multiple is intended to be the going concern value of the operating assets of the company (often net of working capital related financing), not the value of the shares. To arrive at the value of the shares, we must then deduct non-working capital related debt from the equation.
Goodwill: Definition and Calculation
When selling a business, the amount of goodwill is often a difficult part of the negotiation and a limiting factor on price and payment. What is the value of your name and reputation?