Going Beyond DCF
April 21, 2021
by an intermediary from The University of Chicago - Booth School of Business in Chicago, IL, USA
In this Searchfunder Session, we speak with Searchfunder member, Mike Adhikari about his views on why DCF may be the wrong approach for small business transactions and how to get bey0nd it.
Register in advance for this meeting:
https://mit.zoom.us/meeting/register/tJMldeisrDwtEtfnW-REQRQHFd2aINVr_OPl
After registering, you will receive a confirmation email containing information about joining the meeting.
Searchfunder Sessions is an information series so that Searchfunder members and interested members of the public who are exploring the search fund concept or actively searching for a company to acquire and operate as a CEO. Through Searchfunder Sessions, you can learn about the phases of a search fund, stay up to date on issues and trends in the search community, plus gain tips and tricks to get the most out of your Searchfunder membership. During each Session, you will have plenty of opportunities to network with other searchers and ask questions.
This event will be live streamed on Searchfunder. This event is open to Searchfunder members and members of the public interested in this topic.
Photo by Emil Kalibradov on Unsplash
Register in advance for this meeting:
https://mit.zoom.us/meeting/register/tJMldeisrDwtEtfnW-REQRQHFd2aINVr_OPl
After registering, you will receive a confirmation email containing information about joining the meeting.
Searchfunder Sessions is an information series so that Searchfunder members and interested members of the public who are exploring the search fund concept or actively searching for a company to acquire and operate as a CEO. Through Searchfunder Sessions, you can learn about the phases of a search fund, stay up to date on issues and trends in the search community, plus gain tips and tricks to get the most out of your Searchfunder membership. During each Session, you will have plenty of opportunities to network with other searchers and ask questions.
This event will be live streamed on Searchfunder. This event is open to Searchfunder members and members of the public interested in this topic.
Photo by Emil Kalibradov on Unsplash
from The University of Chicago in Chicago, IL, USA
The model uses DCF but overlays access to capital, capital market constraints and transaction structure. It eliminates WACC which is a source of major overvaluation.
The model helps understand questions like:
1) Why two businesses in same industry have different multiples?
2) When growth can reduce value?
3) What is more important than IRR?
4) What would happen if actual growth is less than the expected growth?
from Indian Institute of Technology, Delhi in Toronto, ON, Canada