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Business Valuation Insights
What Does ChatGPT Think?
October 14, 2024 / in Business Strategy, Business Valuation / by Joe Orlando
This October, I will celebrate my 12th year as an Accredited Senior Appraiser (ASA) in Business Valuation with the American Society of Appraisers (also ASA). ASA members meet every year for an International Conference to discuss current topics and to share knowledge and best practices. I attended the most recent Conference in Portland, OR. A presentation entitled “The AI Revolution – Why it Matters to Appraisers & Application Strategies” by Greg Endicott of Strategic Value Group, …
How to Purchase the Company You Work For
October 13, 2024 / in Acquire a Business, Business Valuation / by Exit Strategies
For many C-Suite employees, owning the company they work for would be a dream come true. If you’ve been leading a successful private business or are a seasoned member of its executive team, acquiring that business may be a realistic goal. Secure Funding Typically, the biggest hurdle in buying a business is obtaining the cash/equity and securing the debt financing necessary to close the deal. The good news is that a healthy business is an …
Acquistition Offers Can Vary Widely
June 19, 2024 / in Business Valuation, Sell a Business / by Al Statz
Beauty is in the eye of the beholder; and when it comes to selling your business, value is in the eye of interested buyers. As sell-side M&A advisors, we determine and agree on a probable selling price range with our clients, but we generally don’t set an asking price or discuss our clients’ value expectations with potential acquirers. Lower-middle-market businesses rarely go to market with an asking price. Different buyers see different value in your business; …
Exploring Donor-Advised Funds for Privately Held Business Owners’ Philanthropy
May 17, 2024 / in Business Strategy, Business Valuation / by Joe Orlando
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 favorite charities over time. Many people have successfully used DAFs to support the causes they care about, and there are …
How to avoid being surprised by your business valuation
December 11, 2023 / in Business Valuation, Exit Planning / by Exit Strategies
A significant number of business owners do not know how much their business is worth. That can be a source of conflict in the face of unfortunate events such as a divorce or a partnership separation. But it can be even more painful when the business owner plans to retire, only to find out the business isn’t worth as much as they expected. These owners may have harbored lofty expectations based on personal attachment, …
Are You an Expert at What You Do?
October 16, 2023 / in Business Strategy, Business Valuation / by Joe Orlando
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.” If you click through the link you will notice an obsolete definition for the adjective: experienced. This distinction is important …
Buy-Sell Agreement Valuation Resources
August 28, 2023 / in Business Valuation, Buy-Sell Agreements / by Al Statz
Every business with two or more shareholders should have a buy-sell agreement. A buy-sell agreement is a legally binding contract that restricts and governs how shares are priced and transferred between shareholders or partners of closely-held businesses when certain trigger events occur. Arguably, valuation is the most important (and argued over) aspect of buy-sell transactions. A good one-third of our business valuation work relates to internal equity transactions, and because this is an area of …
A Student of Business
July 18, 2023 / in Business Strategy, Business Valuation / by Joe Orlando
A Difference of Opinions: Closely-Held vs. Venture-Backed Companies- Part 2 of 2
June 8, 2023 / in Business Valuation / by Joe Orlando
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 Diligence, Tools, and Approaches. Part 1 looked at Diligence and Tools, and Part 2 will complete this discussion with …
A Difference of Opinions: Closely-Held vs. Venture-Backed Companies- Part 1 of 2
March 17, 2023 / in Business Valuation / by Joe Orlando
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 noticeable difference of opinions on the diligence, tools, and approaches used in valuing smaller, privately held companies. But before I …
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