Earlier on I had espoused a new valuation approach differently from others based on my experiences in the Strategic Management and Corporate Finance involvement. (Read https://www.linkedin.com/posts/erasmuskoay_if-youre-valuing-your-business-using-ebitda-activity-7285785574571917312-1zPn?utm_source=share&utm_medium=member_desktop)
I had quoted a USD 30,000 job for a group of companies involving poultry farms which was generally accepted by the business owners. Most recently, I had to provide an answer to a yet to be built sugar refinery on a 30-acre land valued at USD 580 million (RM 2,7 billion).
If you have been following the deep tech AI news, some valuations were matched by acquisition at a big price. However, I have to put a caution here - caveat emptor, "let the buyer beware".
If you had watched the series, Shark Tank - you would have noted some particular great successes and tons of failures. The search of unicorns and decacorns is like buying a lottery ticket but with a much better success rate, if you have the right consultants with you.
Our recent examination of 181 successfully funded companies to buy over their shares revealed that more than 70% is not worth paying 2x to 20x for their promised to investors 1 to 5 years earlier. This is almost the same rate or better than what McKinsey & Co. well-documented revelation. (read https://samarata.wixsite.com/website/post/duty-of-care-dcnf)
The New Way - Strategic Valuation Approach
A few weeks ago, a businessman had dropped his jaw when I told him that valuation is not the main key thing in fundraising nor mergers and acquisitions.
To me, whether you are using one of the above approaches with different methods like DCF, EBITDA, weighted average and many others, at the end of the day - how is the future sustainable investment, liquidation, purchase or sell going to fit into your legacy model? (Read https://samarata.wixsite.com/website/post/my-legacy)
Suffice to say, if you wish to know more, kindly write to me at +6012-3715 012. Thank you.
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