Category: Appraisal/Valuation

Crossing the Valuation Gap on Private Equity Transactions

Pepperdine University’s recently released Private Capital Markets Project (“PCMP”) reveals some interesting statistics derived from their survey of the current marketplace for privately-held business sales.  One of the key topics is how a failure to come to terms on valuation conclusions often prevents deals from closing.  For instance, investment bankers surveyed report that a valuation …

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Permanent link to this article: https://betweenthenumbers.net/2014/03/crossing-the-valuation-gap-on-private-equity-transactions/

How Much is Michael Worth?

The IRS is taking serious issue with Michael Jackson’s estate over the value of various assets upon which taxes are due.  According to a recent article in the Los Angeles Times (“LAT”), there is over a billion dollar discrepancy between the value reported by his estate after his 2009 death and the amount concluded by …

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Permanent link to this article: https://betweenthenumbers.net/2014/02/how-much-is-michael-worth/

From Hoops to Riches?

Forbes recently released its annual business valuations of National Basketball Association teams, concluding that most teams became much more valuable since last year (average annual growth of roughly 24%). At $1.35 billion, the LA Lakers for example, are reportedly worth 35% more today than they were a year ago. This year’s growth among all 30 …

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Permanent link to this article: https://betweenthenumbers.net/2014/01/from-hoops-to-riches/

Update your buy-sell agreement as part of your end-of-year duties

Buy-sell agreements are an important business continuity tool that can assist a business in difficult transition times. Usually, the buy-sell agreement either contains a formula, or requires an annual determination of the price to be employed. All too frequently, the business owners do not revisit the formula to ensure that it remains sensible in light …

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Permanent link to this article: https://betweenthenumbers.net/2013/12/update-your-buy-sell-agreement-as-part-of-your-end-of-year-duties/

Goodwill accounting simplified for private businesses

Last week, the Financial Accounting Standards Board (FASB) approved two exceptions in Generally Accepted Accounting Principles (GAAP) for private companies. Proponents of simplified accounting rules have suggested that private companies be exempted from certain of the more complicated and costly rules. In making these two exceptions, the FASB approved the concept that private companies can …

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Permanent link to this article: https://betweenthenumbers.net/2013/12/goodwill-accounting-simplified-for-private-businesses/

Most S-Corporations should pay greater attention to shareholder/employee compensation

The IRS continues to pursue S-Corporations that do not pay employment/payroll taxes on what the IRS considers to be reasonable compensation. Following other cases on this subject, in Sean Mcalary Ltd, Inc., vs. Commissioner Of Internal Revenue, T.C. Summary Opinion 2013-62 (August 12, 2013), the Tax Court generally ruled in favor of the IRS. The …

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Permanent link to this article: https://betweenthenumbers.net/2013/11/most-s-corporations-should-pay-greater-attention-to-shareholderemployee-compensation/

What Buyers Don’t Want

When you own your home, most people have a never ending to-do list of home renovations they would like to accomplish.  Home improvements can be expensive.  For most upgrades, you do not get a dollar-for-dollar increase in the value of your home.  However, most people still choose to carry out the renovation for personal enjoyment. …

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“Shark Tank” Doesn’t Get Venture Capital Valuation Right

ABC’s popular TV show, “Shark Tank,” shows negotiations between entrepreneurs and five Venture Capital (VC) investors (“the Sharks”). Before describing their company, business owners typically make a request in the following form: X thousands of dollars in exchange of Y percent ownership in the company. For example, in a recent episode, the two owners of …

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Permanent link to this article: https://betweenthenumbers.net/2013/06/shark-tank-doesnt-get-venture-capital-valuation-right/

Re-writing Economic History with a Substantive Change to the GDP formula

The Bureau of Economic Analysis’ (BEA) report of Gross Domestic Product (“GDP”) is one of the most commonly used indicators of economic health.  It measures the total value of all finished goods and services produced in the U.S. within a specified period (normally a year). In July that number is guaranteed to go up, yet …

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Permanent link to this article: https://betweenthenumbers.net/2013/05/re-writing-economic-history-with-a-substantive-change-to-the-gdp-formula/

Venture Capital Funding Declines in Southern California

The Los Angeles Times reported that venture capital funding has declined considerably in Southern California.  The article sourced data compiled from Dow Jones VentureSource, which provided the following statistics: Southern California companies raised $507.6 million from venture capital investors for Q1 2013, a 42% decline from Q1 2012 The amount raised in Q1 2013 was …

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Permanent link to this article: https://betweenthenumbers.net/2013/04/venture-capital-funding-declines-in-southern-california/