Gone are the days when you could support your opinion by simply saying, “It is based on my professional judgment.” If you’re in court, the triers of fact are very sophisticated these days, and you must be ready to fully support your opinion, even in difficult areas that require subjective judgment. Also, there are a lot more Daubert challenges to valuation experts today, so you need to be prepared for that, which is almost inevitable.
Show your work: Whether it’s normalization adjustments, discount rates, market multiples, or the like, one way to support your opinion is to show exactly what you did and why. Present a road map, show all of the steps you took, and explain your reasoning in detail for each step. Show any data and analysis you did. Don’t use jargon, but, if you have to use technical terms, define and explain them. It is often very difficult to explain what may seem to be unexplainable, but this technique will help.
When valuing startups, there will be more areas of subjective judgment than with a mature firm, so attend the session, “Professional Judgment and Start-Ups: On Your Mark, Get Set, and Go,” which attorney David Griffin (Rutkin Oldham Griffin) and valuation expert Ron Seigneur (Seigneur Gustafson LLP) will conduct at the National Divorce Conference in Las Vegas May 8-10. Presented by BVR and the American Academy of Matrimonial Lawyers (AAML), the conference will bring together the leading matrimonial attorneys and financial and valuation experts. Don’t miss it!
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