This is the second in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduced the Ownership Transfer Matrix. In the this concluding post, we dive deeper into the ownership question.
This is the first in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduce the Ownership Transfer Matrix. In the concluding post, we dive deeper into the ownership question.
When I read about Uber’s most recent financing, which valued its equity at $51 billion, I thought about FedEx Corporation, a Memphis-based company. I then wrote a blog post titled Uber Market Cap of Equity Exceeds that of FedEx. This past week, my thoughts about FedEx turned towards AutoZone, another Memphis-based company, as well as […]
Recently I spoke with a business owner who had almost sold about half of his company to a private equity investor a few years ago. The facts will be changed in this story so that neither he nor I should be able to recognize his company. However, the conversation highlights a potential opportunity for owners […]
This post introduces the concept of “interim time,” which is the easily lost time between two critical goal posts in the life of a business owner, his or her current status quo and their business end game. It is, after all, what we do during this interim time that prepares us not only for our inevitable business end games, but also for the rest of our lives.
The issue of whether private companies should pay dividends is an important one. Many private company business owners (and boards) resist paying dividends because they desire to retain flexibility at their companies and do not desire to incur risk from leverage (or slower ability to repay debt). The interesting thing about this position is that it creates polar opposite effects on private companies and their shareholders. What follows are ten good reasons to consider paying private company dividends and five things that some folks say represent the downside.
A decade ago, Richard Jackim and Peter Christman wrote a book entitled The $10 Trillion Opportunity. The second edition had the subtitle of “Designing Exit Strategies for Middle Market Business Owners.” While the book did provide a guide for financial advisers working with middle market business owners, I don’t recall that it provided a basis for […]
On Friday, I read a headline that said that, based on a recent round of financing in which $1 billion was raised, the equity capitalization of Uber is about $51 billion. I thought that was staggering, since I knew that Uber was only a few years old and, well, that’s a lotta value. Its investors included Microsoft and the Times Internet Group of India per the Wall Street Journal.
A good friend and nationally known speaker, Don Hutson, invited me to join the National Speakers Association way back in 1997. NSA conferences are just about the only non-appraisal related meetings I attend. Last week, I attended the 2015 annual convention of NSA, where the theme was Influence.
I attend the NSA conferences to learn more about the art and craft of speaking, as well as to hear about new trends in social media and more. However, this year, I was pleased to find the session beneficial both for me personally and professionally, but also, perhaps, for you as well in my top 10 takeaways.
A key assumption necessary to develop capitalization rates and valuation multiples for capitalizing EBITDA is that of the EBITDA Depreciation Factor. We begin by examining the relationship between Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). We also test the general discussion with some market evidence.
