Deal Insight Series Highlights:

The right approach to valuing a business




One big mistake to avoid making when valuing a business - with Ran Carmon

The transcript of the interview follows:

How would you reconcile business buyers and sellers when it comes down to business valuation?

When buyers and sellers look at a deal they are mostly focused on the figure. But actually, the key to doing the deal is the structure. They usually, when they come the meeting, they almost ignore the structure bit. And it is that structure bit that we use in order to put the deal together in a way that will work. So, let’s say, a buyer came to that meeting and they expect to pay £5 million for the company. A seller came to that meeting, and they expect to be paid £8 million for the company. We might be able to give them the £8 million if we paid for the business over a longer period of time – neither of them have thought about that. So it is a question of how you structure the deal, and it is a question of how the personalities work in that scenario, more than it is a question of the absolute figure. It’s the person who is focused on the absolute figure that ends up losing because they lose sight of what is really important.

See the full interview here.

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