BV International

Why Advance Valuation?

Why Advance Valuation
  • An advanced valuation is necessary to find the best way to leverage the entrepreneurial business plan so they can formulate a communication approach that shows investors their strategy is world-class. BVint Valuation is a key component to identify and technically prove the existence of areas of opportunity or to ensure the potential of the business is fully demonstrated and recognised by a potential acquirer.
  • According to statistics, most of the projects are rejected due to unsupported, inaccurate and subjective / optimistic presentations. M&A advisors are important but not enough. An independent valuation is the best way to show to potential investors that perspectives are real and not biased.
  • Investors look for good projects but also entrepreneurs who have assessed and master all risks involved. Our advanced valuations is the only way to acquire the necessary expertise and language to approach professional and institutional investors. Communication must be rational but also independent.

An advanced independent valuation provides Entrepreneurs with the necessary tools to present themselves with a value creation plan based on a realistic risk analysis that shows institutional investors, not only their vision, but also their level of awareness and management of all risk variables involved in the business.

 

 

It has become more important to rely on Entrepreneurs who fully understand and correctly quantify the risks of investing in this asset class. Entrepreneurial subjective point generates a wide gap between sellers’ and buyers’ price expectations and as a consequence many deals are rejected or unsuccessful. Some differences between advanced and traditional approaches are listed below:

 

Advance Stochastic Models

  • All possible scenarios included
  • Clear and detailed picture of market and specific risks
  • Complete assessment of specific risks
  • Volatility in time and business flow
  • Drivers are based on Macroeconomy, Market, Strategy, Technological and Operative value drivers
  • Value at risk : Probabilistic Analysis
  • Risk Profile: Standard Deviation, Kurtosis and skewness are fundamental values for decision making in terms of risk aversion and portfolio investment
  • It measures the importance and effect of each single driver
  • It provides the tools for future value creation plan and risk management.

Traditional Static Models

  • All risks are assessed in a single figure: Discount Rate
  • Discount rates and betas are assessed according to past history of similar investments and therefore more difficult to be applied for small and illiquid assets
  • Discount rates may not capture all specific risks
  • Much more difficult for reflecting reality
  • The business and its markets cannot be well understood
  • The output is a static value with no risk scenarios and detailed value drivers and therefore is not useful for decision making
  • The output is only used to justify a decision made in advance
  • It measures the importance and effect of each single driver
Looking for a first-class business valuation consultant?

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London, UK, W1H 1DP

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6 Sir William Reid Street, Gzira, Malta​

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