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The world of Artificial Intelligence (AI) is booming, and so are AI startups. But how do you determine the true value of a company built on cutting-edge technology? Investors use a multi-faceted approach, considering not just financial metrics but also the innovative potential and long-term viability of the AI solution. Continue reading

It’s not uncommon for companies to operate under a multi-entity structure. This means multiple legal entities function under one umbrella, each with its own assets, liabilities, and income streams. While this structure offers advantages, valuing such businesses requires careful consideration of the intricate web of relationships between these entities. Understanding Continue reading

Make sure your bookkeeping is well-oiled before a valuation! Imagine you’re selling your car. To get a good price, potential buyers need to see it’s in top condition. The same goes for your business. When it’s time to sell, its financial records are like the car’s engine – they reveal Continue reading

Understanding the difference between divestitures and liquidation, as well as the key drivers behind them, empowers businesses to make informed decisions about their portfolio. Divestment vs. Liquidation Both divestitures and liquidation involve parting ways with assets. However, the end goals differ: Divestment: This is a strategic decision to sell or Continue reading

Ever wondered how much your thriving business is worth? While there’s no one-size-fits-all answer, profit plays a crucial role in the valuation equation. This blog post delves into the world of “profit multiples” and how they influence the perceived value of your company. Future Maintainable Earnings Method Imagine a valuation Continue reading

Understanding how debt factors in can empower you to navigate the valuation process with confidence. The Enterprise Value Equation One of the most common methods for business valuation is Enterprise Value (EV). This metric goes beyond simply looking at a company’s stock price. Instead, it paints a holistic picture by Continue reading

Imagine this: you’ve built a thriving company, a testament to your hard work and dedication. But when it comes to selling, the concept of goodwill throws a curveball. Here’s the deal: this intangible value might not be a factor for your business, and that’s okay! What is Goodwill, Anyway? Goodwill, Continue reading

Understanding valuation multiples by industry is a critical tool. However, it’s essential to wield this tool with a keen eye. While EBITDA multiples offer a starting point, relying solely on them can lead to skewed results that fail to capture a company’s true value. Why Valuation Multiples Need Context Valuation Continue reading

What is ESG? Environmental, Social, and Governance (ESG) factors are increasingly shaping the way businesses operate and are evaluated. In simpler terms, ESG is a framework that considers a company’s commitment to the environment, its social responsibility, and its overall governance practices. These factors are no longer seen as separate Continue reading

When it comes to buying or selling a business, understanding its true business value is crucial. While profitability is certainly a key factor, there’s a hidden X-factor that can significantly impact a company’s worth. Let’s delve deeper into the five essential elements that determine a business’s true value: 1. Market Continue reading