BVWire attended the 21st Annual Current Topics in Business Valuation conference presented by the New York City chapter of the ASA. Here are a few highlights from this very fine event:
A DLOM toolkit is now in beta testing, announced Jim Hitchner (Financial Valuation Advisors). The toolkit is designed to develop a supportable DLOM using existing research studies, databases, and models. But it’s “not a black box,” he says. You can drill down and see exactly how it all works. He developed it with Jim Alerding and Josh Angell.
Using an option model to value startups is the subject of a paper presented by John Finnerty (Alix Partners). His new model expresses the value of an emerging growth firm’s common stock as a call option on the firm’s assets struck at the cost of the future investment to make the product viable plus the cost of retiring the debt that’s needed. While the model could use some simplification, he demonstrated it with several real-life examples and urged users to “try it out and improve on it.” For a copy of his paper, click here.
More opportunities for fund valuations are on the horizon, says Craig Ter Boss (Eisner Amper). He says the ongoing scrutiny on fund valuations by the PCAOB and SEC will trigger increased use of third-party valuation experts by fund managers.
For more highlights, see the May 7 issue of BVWire.