Frequently Asked Questions
What kind of deal structure is assumed in the valuation?
EZValuation assumes a cash at closing deal. In a deal where there is owner financing, earn-outs, or other ways that risk is reduced for the buyer the total purchase price can be higher. If you have questions about how a particular deal structure might affect the valuation, please contact us.
Our valuation methodology also assumes that the owner is selling a controlling interest in the company. If the buyer receives less than a controlling interest there may be a discount for lack of control and other factors that affect the sale price.
How long will it take me to value my company?
The process is designed to take between 5 and 15 minutes from start to finish.
Why don't you produce valuations for companies with annual sales greater than $20,000,000 or annual profits greater than $5,000,000?
When sales exceed $20,000,000 or profits exceed $5,000,000 there will be interest from Private Equity Groups and other buyers to acquire the business as a platform company and build it for IPO or future sale. While EZValuation can adjust for size, when a company gets that large we believe that a person with knowledge of the market does a superior job.
Why do you value my company based on its past performance instead of my projections of the future?
Projections of the future are likely to be greeted skeptically by a buyer, unless they are backed with compelling facts such as in-place contracts. Buyers reason that future growth will come from the their own hard work and from the capital thry are risking.
Having said that, buyers are really buying the future of the company. It's recent past performance and trend is used as an indicator of its near-term future. EZValuation asks about and uses projections in its analysis, along with past performance. The tool is designed to give more weight to projections based on tangible evidence (such as a backlog of business signed contracts) than for projections based solely on expectations.
Is this valuation valid for a merger?
It may not be. In a merger where existing owners become part of the new company there are a number of factors that affect the value of the new entity. Please see our blog entry on why valuation in a merger may be different from that in an acquisition for a more complete explanation.
What if I have a problem during the process?
If you have a question that is not answered please contact us.
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