For business owners of privately held companies seeking a seamless and impactful way to contribute to charitable causes, Donor-Advised Funds (DAFs) have emerged as a philanthropic and tax-efficient solution. These vehicles offer a flexible and tax-efficient way to manage charitable donations, allowing donors to make contributions to a fund and then recommend grants to their […]
So what is an expert and, more importantly, are you one? The term “expert” has many definitions. For anyone who has written a wedding toast or sat through a valedictorian’s speech you know how the next sentence starts…Webster defines an Expert as “one with a special skill or knowledge representing mastery of a particular subject.” […]
In Part 1 of 2 of this blog, I spoke about my transition from valuing venture-backed technology startups to valuing owner-operated small to middle-market businesses with $2 million to $50 million in revenue. As part of that discussion, I set the stage for three differences in how these types of businesses are valued, specifically differences […]
In my transition from leading a valuation practice at an accounting firm to an M&A advisory firm, quickly realized significant differences between valuing venture-backed technology startups to valuing owner-operated small to middle-market businesses with between $2 million to $50 million in revenue. Over the last four years, I’ve concluded that there is a distinct and […]
We all remember the question; what did you do on your spring break? Whether it was the title of a paper you needed to write for 11th grade English class or the topic of discussion at the pub in late April of your senior year of college, it’s a great question whose answer can be […]
The Risk Free Rate – Part 1 of 5 One of the most important inputs surrounding the valuation of the business is the discount rate that is used in the analysis. This discount rate is the expected rate of return on the subject interest which in most cases is the equity in the value of […]
The first four parts of this five-part blog have dealt solely with the components of the buildup approach and the determination of a cost of equity. However, when determining a discount rate, it is important not to forget the ability to access debt. Each of the preceding parts of this discussion focuses on the cost […]
Up until now, our discussion of the discount rate as “one of the most important inputs surrounding the valuation of the business” has focused on overall market data that arrives at the basis of risk associated with the cost of equity for a privately held company. We’ve begun with a risk-free rate and added risk […]
So far, in our educational discussion of the discount rate as “one of the most important inputs surrounding the valuation of the business”, we introduced the first two inputs of the build-up approach. Added together, these two inputs equal the expected market return of equity. However, because the equity risk premium looks at the overall […]
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