May 12, 2020

Business Valuation in the COVID-19 Recession

So how do you value a private business in New Zealand in these covid19 recession times? It’s not simple. The process I suggest is to: work out if your business truly is a going concern forecast your earnings and balance sheet during and post-shutdown analyse the risk of those future earnings in the coming years … Read More

by Bruce McGechan
February 21, 2020

Valuation for Start-Ups from a Venture Capital perspective

This article outlines approaches to valuing a new venture from a venture capital (VC) perspective. It attempts to help early and late-stage start-up entrepreneurs value their business when raising equity. At its heart business valuation is the sum of the discounted future cash flows. Easy to say, or write, in practice it’s difficult. Difficult for … Read More

by Bruce McGechan
January 22, 2020

Valuing a Share Sale Offer vs an Asset Sale

This article is for those valuing a share sale for a mid-market private business. It is crucial to understand the offer’s net asset position at settlement before you can understand the total value of a share offer to the seller or buyer. Mid-market business prices are usually expressed as “Price plus SAV” (stock at valuation). … Read More

by Bruce McGechan
December 12, 2019

Venture Capital with Lance Wiggs

Episode 7 of the Curious Kiwi Capitalist Podcast 12th December 2019 My guest for this episode is Lance Wiggs, Manager of the Punakaiki Fund, a Venture Capital fund. We discuss the New Zealand venture capital landscape and how a venture capital firm operates.┬áLance takes a different approach to most VCs in how he has structured … Read More

by Bruce McGechan
October 10, 2017

Example of Valuation in New Zealand

In this article I’m going to look at how to value licensed restaurants or cafes for the purposes of selling a business (using “fair market value” in an asset, not share, sale). The same approach can be used to value most hospitality businesses including non-licensed cafes and restaurants, and bars. Sample Cafe Profit and Loss … Read More

by Bruce McGechan
March 13, 2017

Business Valuation in New Zealand

Summary There are three overall methodologies to value a business: 1) Income-based including Capitalised Earnings and Multiple of Discretionary Earnings methods 2) Market-based including Direct Market Data and Rules of Thumb methods 3) Asset-based such as Asset Accumulation method Introduction You’ve spent years building your business, you treasure the friends you’ve made with customers, suppliers … Read More

by Bruce McGechan