Highlights from the 2020 NACVA Virtual Super Conference

NACVA recently held the first major multiday multitrack conference of the year online, and BVWire attended via the Zoom platform. We found excellent speakers, interesting sessions, and the technical details all went smoothly (attendees even received lunch credits via GrubHub).

Here are eight interesting takeaways from the virtual event:

1. You can get into trouble with ethics if you face an issue that you may not be competent enough to handle, so you should bring in a third-party expert. But that brings up a curious question: How do you know you’re not competent? points out Rob Schlegel (Houlihan Valuation Advisors).
   
   
2. When courts reopen to jury trials in the wake of the pandemic, juries will be more anxious than ever because of lingering worries about the virus, says Judge Timothy Driscoll of the New York State Supreme Court—Commercial Division. Courts aren’t sure what to do about this yet, but testifying experts need to recognize it.
   
   
3. Just because you see something fishy in the financials doesn’t automatically mean it’s fraud—most of the time it’s just an error, says Robert Minniti (Minniti CPA LLC). He advises that you talk with management and the accountants about it. If it ends up that the matter is likely to be fraud, consider withdrawing from the engagement.
   
   
4. Cannabis is now deemed an “essential” service in most jurisdictions that have legalized medical or recreational access, and a number of states have relaxed restrictions on access due to COVID-19, such as allowing home delivery (unheard of a short time ago), say Ron Seigneur and Ryan Cram (Seigneur Gustafson LLP), who have a paper out on cannabis and hemp valuations.
   
   
5. “Partnership is the new leadership,” says keynote speaker Ty Bennett (Leadership Inc. Institute). No longer does title or position guarantee that you will be accepted as a leader. One example: 20,000 company workers walked off the job when the snooty majority owner tried to buy out the co-owner, who was down-to-earth and loved by workers.
   
   
6. Be aware of changing capital structure when doing a cost of capital analysis, says Roger Grabowski (Duff & Phelps). Especially during the pandemic, some companies may have added debt to raise cash, but those debt levels will not continue long term.
   
   
7. A wave of business interruption cases is expected in the face of the hard line insurers have taken to deny coverage for virus-related claims, so attorneys will need calculations for that, according to Allyn Needham (Shipp Needham Economic Analysis LLC). Attorneys are advising clients to file claims even though coverage may be iffy, reports Rebekah Smith (GBQ Consulting).
   
   
8. A poll of attendees revealed that 75% do not include anything about cybersecurity risk in their valuation reports. That’s a problem, say Dave Miles (ValuSource) and cybersecurity expert Ray Hutchins, a managing partner at CyberCecurity LLC, because cybersecurity is a definite risk that each and every business faces. Yes, there’s cyber insurance, but it will not cover everything, such as damage to a company’s reputation.

If you weren’t able to attend this year’s virtual conference, be sure to stay tuned for more coverage in BVR’s free weekly ezine, BVWire, and in our newsletter, Business Valuation Update.