<< PRESENTATION ON ENTERPRISE VALUE>>
The Enterprise Value (EV) is what an investor will pay for the business
• Different investors may value a business differently
• An investor wants a future return and will have different strategies to achieve it
• Without a future story your EV will be defined by your past results
So, you need to look at your own business differently.
• Look at your business like an investor.
• Are you a good investment?
• Look Outside In,not Inside Out
• It’s not about you
• Understand drivers of value
• Understand how investors in your industry think
• Understand how investors in adjacent industries think
• What return could an investor get if they put their money somewhere else?
Not only Financials
• Quality of Earnings (consistency)
• Repeatability of Earnings (one off vs recurring revenue)
• Client Concentration (few customers vs many)
• Strength of Management (experienced? Done it before?)
• Industry Type (attractive, emergent? in decay?)
• Niche Offerings (uniqueness, specialty)
• Strategic Fit (alignment with other parts of portfolio)
• Control Premium / Discount
• Emotion (it’s cool, I want it!)
