Valuation Principles and Working with Earnouts | PJ Patel w/ Kison Patel

PJ Patel, Co-CEO & Senior Managing Director at Valuation Research Corporation (VRC) This episode is sponsored by the M&A Science Academy, DealRoom, and FirmRoom. To join our growing online community of M&A practitioners, visit https://www.mascience.com/academy. Don’t forget to use code “podcast” at checkout. Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://www.dealroom.net FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to https://www.firmroom.com Bookmarks 00:00 Intro 08:43 Market Trends 12:25 Maximizing your company’s valuation 14:02 Growth vs Cash flow 16:06 The effect of Storytelling on valuations 17:26 Investor’s influence on valuation 21:25 Things to avoid as an operator 24:26 Common Mistakes in Valuation 27:09 Impairment 31:12 Implications of impairment 34:21 Purchase price allocation 37:42 Earnout structures 44:39 Length of earnouts 40:11 Computing for Earnouts 54:02 Negotiating Earnouts 57:40 Craziest thing in M&A __________________________________________________ Website: http://mascience.com/ Linkedin:   / mascience   Twitter:   / m_a_science   Facebook:   / masciencepodcast   __________________________________________________________ ABOUT M&A SCIENCE M&A Science is the world’s first community resource for M&A tips, techniques, and strategies to achieve desired outcomes and better success. We bring you behind the scene stories, proven techniques, and key takeaways of real-life M&A deals. For more exclusive content from the industry's top experts, visit mascience.com