VALUSCORE™ – THE ENTERPRISE VALUATION RANKING
For the Business Owner:
A ValuScore™ helps the Business Owner understand the Capital Markets Alternatives. Capital markets options provide alternatives for, pricing, timing and probability of success.
For the Investor, Buyer and Lender:
The ValuScore™ provides validation of the premise that the Business Owner is sponsoring.
This Deal Screening Process scores and rates your business as a financing candidate:
- Deal rating and score computation to assess the funding potential and its cost to your business, as documented in a Business Valuation.
- Preliminary due diligence to ensure that many of the corporate documents are in order.
- Deal presentation material additional information to support the presentation to funding sources.
- Management of value drivers to enhance your proposal to improve deal score and rating.
A ValuScore™ has 50 trigger points, like the system used by FICO for credit evaluation, applied to a scoring system like Moody’s Rating System.
All deals receive The ValuScore™, which is aligned to how a financier assesses acceptable minimum scores to finance a deal. The ValuScore™ translates all sources of capital pools under the same objective system.
|AAA||950-1000||All Financing Sources|
|A||800-849||A and B Grade Financial Sources|
|B||550-649||B Grade Financial Sources|
If you have a B-Grade Deal and should take the necessary steps to upgrade to a higher score. Otherwise, you should lower your expectations about completing a transaction. Because there are fewer capital sources willing to accept B-Grade Deals, the costs are much higher than an A-Grade Deal. If your rating is below a B-Grade Deal and you’re not willing to do what is necessary to move up to at least a B-Grade, then it is unlikely you will complete your transaction.
Scoring Criteria – Deal Grades
A summary of the 50 trigger points scoring criteria is shown in the following table along with the maximum score for each.
|Growth of Industry||10.0%||100||80|
|Unique Attributes of product/service||15.0%||150||100|
|Market Size and Potential Share||15.0%||150||125|
|Competitive Advantage—Business Model||15.0%||150||135|
|Personnel & Management Prior Success||15.0%||150||140|
|Financial Analysis Report||5.0%||50||50|
|Due Diligence Review||5.0%||50||40|
|Deal Potential—Reasonableness of Terms||15.0%||150||130|
Category values are summarized in the ValuScore™ Report along with a more detailed definition of each score value.
Deal Ratings – All prospective transactions (deals) receive a score. Each but-side participant determines the minimum score they will accept to finance a deal. A Business Valuation expert scores all sources of capital pools under the same updated system to remove subjectivity.
Once you’ve completed a Deal Screening Process, you can investigate several alternate financing opportunities. Please note that deal structure uses one or multiples of various available instruments to maximize returns at the lowest possible risk to all involved parties.
- Venture investment
- Debenture investment
- Initial public offering (IPO)
- Gain control of public company
- Sale of certain assets
- Sale of all stock
- Sale of company assets
- Divesting a division
- Line of credit
- Debt financing
- Distribution alliances
- Marketing alliances
- Joint ventures
- R&D joint ventures
- Exclusive technology licenses
What to expect:
A Business Advisor would state recommendations to you before he or she would create a deal structure.
This will give you the opportunity to take necessary actions to move your business to a higher score before taking the next step.
Valuation Services we Offer:
|Capital Markets||Financial Reporting − CPA Firms|
|Buy a Business||Acquisition – Allocating Purchase Price|
|Combination Merger/Cash Out||Business Combination (SFAS 141)|
|ESOP/Management Buyout||Derivative Instrument Valuations (SFAS 133)|
|IPO: underwritten, self-underwritten,||Fairness Opinion & Solvency Opinion|
|reverse merger or via bankruptcy)||Fair Value Measurement (SFAS 157 & 159)|
|Joint Venture||Goodwill & Intangible Asset Impairment|
|Outside Investor(s)||Analysis (SFAS 142)|
|Private Equity or Venture Capital||Intangible Asset / Intellectual Property|
|Sale of Business||Appraisals (patents, copyrights, royalties, trademarks)|
|Sales to Insiders/Relatives||International Accounting Standards|
|Strategic Alliance||Compliance (IAS 36 & 38)|
|Tax Compliance Requirements||International Financial Reporting Standard|
|Built-in Capital Gains Analysis||Compliance (IFRS 2 & 3)|
|C Corp. to S Corp. Conversion||Option Pricing / Share-based Payments|
|Common Stock||(SFAS 123R)|
|Cost Segregation Study||Restricted Stock Compensation|
|Estate Tax Planning and Filings||(SEC Rule 144)|
|Gifting Programs (FLPs, LLCs, CRTs) to charities, employees, children||Litigation Support|
|Research & Development Analysis and IRC §41 Tax Credits||Bankruptcy: Organization or Shareholder|
|Restricted Stock Options (IRC §409A)||Collaborative Legal Expert|
|Subchapter S net recognized built-in gain application||Divorce or shareholder dispute|
|Roth IRA Conversions||Forced Restructuring|
|Transfer Pricing||Lost Profits & Damages|
|Analyze Value Drivers||Interactive Budgets and Projections|
|Benchmarking||Phantom Stock/Appreciation Rights|
|Buy-Sell & Key-Man Agreements||Strategic Planning for Value Growth™|