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FAQ's

Frequently Asked Questions

Standards, Valuation Bodies, Accredited Reports and Liability

No. Existing valuation software are based around live DCF methodologies and sensitivity analysis, which are, in short, bringing Excel models live onto web pages. Valu8er™ is not a tool. Valu8er™ is in the business of studying industries and transactions, calculating suggested multiples, and automating reports at the highest standard (auto generated reports that you can send to your customers and charge for).

 Valu8er enables users to use the Maintainable Cash Flows (MCF) Methodology along with building your own multiple.  In fact, a large portion of Valu8er™’s existing customers continue to do valuations as such, as existing standards enable it.  The advantage of Valu8er is that reports are done 10 to 20x faster, with the complete elimination of excel and word, and report production.  Thus, valuators prefer the software for its efficiencies and automation of report production, the same way accountants prefer software for working papers and financial statement preparation as opposed to excel and word.  In addition, a user can, at any time, forego building their own multiple and trust Valu8er™’s MCF methodology with an automated ‘Built-Up’ multiple concluded on a Relative Basis and based on the 15 Pillars of Valuation.  The advantage is that a trier-of-fact will know that the valuator’s multiple is not impacted by human bias at all. 

We mean the highest standard by the literal definition of standard, which equates to “a level of quality.” Valuation membership bodies provide no guidance as to the structure, layout, presentation, and analytics to be included in valuation reports. As a result, valuation reports are difficult to compare, and it is normal practice for triers-of-fact to force opposing valuators to provide a “table of differences” to better make sense of the differing reports. Valu8er™ establishes its own standards to ensure its reports include the best structure, layout, presentation, and analytics, therefore making reports easily understood and comparable. Further, Valu8er™ establishes its own ‘relative valuation’ metrics that are beyond regular guidelines to provide absolute precision in the calculation of independently suggested multiples.

No. Valu8er™ is a better, cleaner, and more independent way of doing valuations than the traditional, ‘build-up’ way of doing valuations. Valu8er™ enables the valuator to focus on the high-risk areas of the valuation engagement and not worry about writing up reports or forgetting to change names in a template file. The power saw did not eliminate the need for arborists – it just made their job easier.

 It is a general method used globally. Valuation bodies do provide the market approach using relative valuation as an option, but up to now, most valuators prefer to ‘Build-Up’ their own multiples.  

No – if the user completing the report is not a part of a valuation membership body, he or she must identify this when completing the report, and accordingly, the report will indicate that the report is not being prepared under any membership body standards. A better example is non-accredited and accredited accountants both using a software to generate financial statements – the software puts together a clean automated financial statement but does not sign off for you.

Yes, 100%.  Whether you build your own multiple or allow Valu8er™ to independently calculate one on its own, it is the user that completes the entire valuation, submits the report, accepts it, and sends it off for whatever purpose (like using software to complete accounting engagements).  It is recommended to have errors & omission insurance in whatever profession you are in (real estate, accounting, valuations, etc.).  

Yes you can.  Further, you can receive assistance, at an agreed upon rate, from one of our designated valuation experts to assist with or complete your report.  However, for liability purposes, it is recommended to educate yourself about key valuation matters such as balance sheet allocation, normalization of EBITDA, picking comparables and so forth.  Valuations is not rocket science – but it does require extensive finance knowledge.  Accordingly, it is recommended that you enrol with a valuation membership body’s program of studies, hire someone from such, and/or read and study upon the topic of business valuations.  The same way the most advanced accounting or tax software cannot guarantee that an accountant did not miss any material errors, Valu8er™ cannot guarantee that the most thorough exercise of normalization or picking comparables was performed.  Again, to alleviate this, you can receive assistance, at an agreed upon rate, from one of our designated valuation experts to assist with or complete your report. 

Most of the time it is not necessary, and it is normal for valuation reports to be completed from unaccredited professionals (for e.g. Brokers, M&A professionals, finance professionals, private equity, etc.).  If you have already been doing valuation reports in whatever profession or field you are in – you can continue doing so but now with Valu8er™, providing you with a competitive edge (your multiple is independently calculated, whereas your competitors are ‘building up’ their own).  However, if the report is being used for an adversarial litigation matter where the likelihood of trial is high or for tax reporting, then yes we recommend you complete the report through an accredited valuator using Valu8er™, as the Courts place greater credibility with accredited valuators (In Canada, you may hire someone who is a member of the CBV Institute, whereas in the US, there are several membership bodies to hire from).  You may also wish to not take on such litigious files and refer them directly to Valu8er™ and our team of accredited valuators can take care it, or, at an agreed upon rate, one of our designated valuation experts can assist with completing your report.  However, if the Report is not being used in litigation or tax planning, then yes, you can complete reports without an accredited valuator, as individuals from various professions already do so in this unregulated field.  

Report Use Scenarios, Suggestions, Influence and Levels of Reports

 If the disputing parties agree, you can provide separate reports for your client and his/her disputing shareholder, with respective different inputs and assumptions from each disputing shareholder.  Valu8er™  then produces 2 different valuation reports, which can then be used between the disputing parties to help resolve their differences in an exceptionally clean and organized manner. Valu8er™  can also be retained to provide mediation services to further bring the parties closer together.  However, if there is a shareholders’ agreement or one of the shareholders is a minority shareholder, then the next step of calculating individual interest would require greater complexities and it is suggested to use the services of an accredited valuator using Valu8er™ , or you may refer the file directly to Valu8er™.  Further, you can receive assistance, at an agreed upon rate, from one of our designated valuation experts to assist with or complete your report.     

 If your client’s spouse agrees with you doing the valuation through Valu8er™, you may proceed to do so.  However, your client will have a bias for a lower valuation which often results in human bias, and there may be the perception given it is your client.  Accordingly, it is suggested to use the services of an accredited valuator using Valu8er™, or you may refer the file directly to Valu8er™.  Further, you can receive assistance, at an agreed upon rate, from one of our designated valuation experts to assist with or complete your report. 

Yes. However, the report will indicate that the user has entirely dictated their own multiple based on his or her perceived risks of the business.

Yes. The user has a great influence on the valuation.  The user still dictates normalized EBITDA levels, capital expenditure requirements and answers various risk factors.  A user can paint an over rosy picture, or a not-so-rosy picture.  It is like how one can fool a car pricing website such as AutoTrader by not inputting the correct mileage or model.  However, Valu8er™ limits the human bias by placing in safeguards and not allowing the user to dictate the multiple. 

Yes, there are three levels of reports, like the accounting profession. The highest-level report is very detailed and visually appealing. There is a price difference between the three, and the decision of which to choose lies is often determined by your customer’s needs and budget. If they need a report for litigation, we recommend the 2nd or 3rd level. If it is for taxes, the 2nd level is a good option.

Source of Private Company Data and Valuation Approach Suggestions

 We recommend subscribing for access to DealStats (https://www.bvresources.com/products/dealstats), as they have data on almost 50,000 historical transactions, including covering 500 Canadian NAICS codes across over 12,000 subindustries.  Furthermore, in instances where there are no Canadian comparables, we suggest using US comparables, as Valu8er™ will automatically adjust US data to reflect historical differences between US and Canada multiple differences within each industry. 

We recommend subscribing for access to SourceFunder (https://www.searchfunder.com/), for access to over 2,000 industry reports via IBISWorld.  

For these such engagements, methodologies can be quite complex and will require looking at comparable companies who raised capital recently, as well as analyzing non-traditional valuation metrics.  We would recommend directly referring to Valu8er™

Cancellation, Charges, Templates and Employee Replacement

No. You may cancel at anytime. Services are provided on a month-to-month basis.

Clients are invoiced for reports only after they are completed and submitted. If you start a report and do not complete it for any reason (termination of engagement, etc.), you will not be charged.

 Yes – you can make “dummy” live files that are free and can be duplicated to start a new file. You can set up as many “dummy” files as you wish.

 This is no problem at all. You may add a new employee to that file and any other files that the departing employee was working on. The new employee will be able to see all outstanding tasks and review notes assigned to the departed employee.

Help

Collaborative/Investor Opportunities

For: Businesses or individuals looking to collaborate or invest in Valu8er

Valu8er Expert Reports

For: Lawyers, Business Owners, Individuals looking to Buy or Sell a business and individuals going through a personal or business separation

Valu8er Software-As-A-Service

For: Expert Business Valuators, CPA firms, M&A firms, Family Offices, CFO/CEOs, Private Equity firms, Portfolio Management firms and Venture Capital firms