44 min

Valuation Principles and Working with Earnouts M&A Science

    • Business

PJ Patel, Co-CEO & Senior Managing Director at Valuation Research Corporation (VRC)
This episode is sponsored by the M&A Science Academy, DealRoom, and FirmRoom.
To join our growing online community of M&A practitioners, visit https://www.mascience.com/academy. Don’t forget to use code “podcast” at checkout.
Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://www.dealroom.net
FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to https://www.firmroom.com
EPISODE TIMESTAMPS: 00:00 Intro
08:37 Market Trends
11:15 Maximizing your company’s valuation
12:24 Growth vs Cash flow
13:35 The effect of Storytelling on valuations
14:27 Investor’s Influence on Valuation
17:14 Things to avoid as an operator
19:14 Common Mistakes in Valuation
20:53 Impairment
23:42 Implications of impairment
25:49 Purchase price allocation
29:05 Earnout structures
32:34 Length of earnouts
32:51 Computing for Earnouts
38:33 Negotiating Earnouts
41:06 Craziest thing in M&A
 

PJ Patel, Co-CEO & Senior Managing Director at Valuation Research Corporation (VRC)
This episode is sponsored by the M&A Science Academy, DealRoom, and FirmRoom.
To join our growing online community of M&A practitioners, visit https://www.mascience.com/academy. Don’t forget to use code “podcast” at checkout.
Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://www.dealroom.net
FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to https://www.firmroom.com
EPISODE TIMESTAMPS: 00:00 Intro
08:37 Market Trends
11:15 Maximizing your company’s valuation
12:24 Growth vs Cash flow
13:35 The effect of Storytelling on valuations
14:27 Investor’s Influence on Valuation
17:14 Things to avoid as an operator
19:14 Common Mistakes in Valuation
20:53 Impairment
23:42 Implications of impairment
25:49 Purchase price allocation
29:05 Earnout structures
32:34 Length of earnouts
32:51 Computing for Earnouts
38:33 Negotiating Earnouts
41:06 Craziest thing in M&A
 

44 min

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