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Discussion in 'General Business Forum' started by Clinton, May 20, 2020.

  1. The Byre

    The Byre UKBF Legend Full Member

    9,985 4,062
    I'm an old fart who has had time to think about these things! But thanks for the compliment!

    I've just been dealing with someone who was given a huge sum of money for their share of a company. He wanted out, the others were happy to see him go. They paid waaaay over the odds for his share, despite the fact that he owned most of the key IP and that walked away with him. They just wanted that narcissistic trouble-maker out! They borrowed from every possible source to scrape together a seven-figure sum just to see the back of him.

    Now, years later, after the two main shareholders turned that company into an even larger business with TO in the hundreds of millions, he is starting to demand all kinds of rights, privileges and of course money.

    Bottom line - he is trying to undo his own mistakes. He took an eye-watering sum back then and now feels the others owe him something! Cash down is not always the best option! (But that's the entertainment biz - no shortage of narcissistic idiots in that game!)
     
    Posted: May 29, 2020 By: The Byre Member since: Aug 13, 2013
    #21
  2. Clinton

    Clinton UKBF Big Shot Full Member

    4,939 2,103
    @The Byre , many years ago I connected in LinkedIn with an Indian chap, a business professor in the US, who knows far, far more than I do about business valuations.

    We had some chats on the topic. His name is Aswath Damodaran. Since then, Prof Damodaran has become one of the world's foremost authorities, if not the most respected person in the world, on the topic of valuing large businesses (usually public ones).

    Herecently said this about valuation: "There is so much to learn."

    I couldn't have put it better! :) No matter how much we know, there's still a lot to learn. And I'm always interested in any quality material on the subject. So I look forward to what you produce.

    A good friend of mine, Liam Gallegos, recently interviewed Prof Damodaran. But there are plenty of other good Damodaran videos on Youtube if you care to watch them. I have no doubt that even an old veteran like you will learn one or two things.
     
    Posted: May 31, 2020 By: Clinton Member since: Jan 17, 2010
    #22
  3. The Byre

    The Byre UKBF Legend Full Member

    9,985 4,062
    It'll only be two 10m head-n-shoulders of me explaining the basics. The first is 'Buying the Corner Shop' and the second is about the real-world example of an engineering company sold for about £1m to the head engineer (who had no money!)

    The trouble is that it is a HUGE subject and the more I look at the subject, the more complexity I discover! But you can simplify things greatly by separating the equity and putting a price on that and then dealing with the rest as a business proposition, such as share options, or payments over time or a fat consultancy fee for the seller - or something else again!

    That is in the SME world. Other worlds are available!

    But for the person buying the business, the fundamental question is not 'How much is this turkey worth?' but what is it worth TO YOU? Never mind Joe Blow over there and never mind Angus Goatposture back there, what can you bring to this business and what can this business bring to you?
     
    Posted: May 31, 2020 By: The Byre Member since: Aug 13, 2013
    #23