The most important person NOT on your Board – your Investor

19.8.2020

Every business owner has an opinion on the value of what they have created. The basis for this valuation can vary wildly; from independent valuations done by an accountant, to asset value, to listed trading multiples or reported transactions multiples as comparisons, all the way to what you’ve heard through word of mouth, “Joe sold his business for a multiple of five times”. However, the opinion that is rarely at the front of mind of the owner, and all that matters at the end of the day, is the value that an investor is prepared to pay.

Similarly, when Shareholders, Executives and Boards gather to set the direction for the future of their business, questions commonly asked may be:

  • What size / scale are we looking to achieve?
  • What markets should we be in, stay in, or enter?
  • Should we expand our product offering?
  • How do we increase our revenue / margin / profit? 

While these are all good questions, the question that is not asked enough is, what are future investors going to value?

If you plan to sell your business in the future, or raise capital to grow (whether equity or debt), it is important to think about your business from a potential investor’s perspective:

  • What are investors in businesses like us looking for?
  • How will they value our business?
  • What parts of the business are more / less attractive to a potential investor?
  • What risks in the business reduce our valuation?
  • What growth opportunities increase our valuation, and how do we get credit for these?
  • What is our timeframe, and how does this align with the timing of an investor?

We see a lot of founders building their business without an exit strategy or a thought for who may eventually acquire the business. Not only may this limit the pool of potential investors and increase the risk profile of the business, but the future value of the business may be eroded significantly.

While not always the easiest thing to do when focused on the day to day of running of the business, examining value through an investor’s lens can provide a more objective view and help shape your strategy. In the long term, this will help you to maximise the value for your business, and the likelihood you can exit on favorable terms. In the short term, instilling best practice will likely create value for the existing stakeholders as well.

So the next time your leadership get together to plan the future, make sure you ask yourself; what is an investor looking for in a business like this? And if you want to know how to answer that question, ask InterFinancial about their Strategic Options Analysis Process.

16.9.2021

Brisbane Marine Pilots charts-a-course with Auriga

Brisbane Marine Pilots Pty Ltd (BMP), a provider of maritime piloting services, has entered a partnership with Auriga Group, another Australian maritime pilotage service provider. BMP train and supply marine pilots to assist ships visiting the Port of Brisbane. They also provide a common safety system that all pilots working within the Port must adhere […]

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16.9.2021

Sector Dashboards September 2021

Our monthly dashboards cover seven key sectors of focus, with each sector built up by several subsectors that cover similar companies based on; products, end markets, services, assets classes or other characteristics. The publications include all companies listed on the Australian Stock Exchange that are actively traded and covered by research analysts, and hence have […]

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20.8.2021

InterFinancial Appoints New CEO

InterFinancial is pleased to announce the appointment of Brad Shaw to the role of Chief Executive Officer. Brad originally joined the team in 2018 as a Director and has over 25 years’ experience in Engineering and Professional Services industries.  Brad has led our Advisory practice for the last two years and has completed several interim […]

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19.8.2021

InterFinancial advises Coxons Group on its acquisition of MRC Australia

InterFinancial Corporate Finance would like to congratulate for Coxons Group Australia on its successful acquisition of MRC Australia. Coxons Group Australia is a privately owned company specialising in the service and maintenance of all cooling system components, specifically radiators and coolers for mining and industrial applications. Coxons Group has been the industry leading service provider […]

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19.8.2021

Sector Dashboards August 2021

Our monthly dashboards cover seven key sectors of focus, with each sector built up by several subsectors that cover similar companies based on; products, end markets, services, assets classes or other characteristics. The publications include all companies listed on the Australian Stock Exchange that are actively traded and covered by research analysts, and hence have […]

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06.8.2021

InterFinancial Expands our Financial Services team

As of July, InterFinancial welcomes Les Jones to the team. Les brings his many years of entrepreneurial experience in life insurance, general insurance and Lloyd’s underwriting. Les has held senior management positions in several major insurers including Suncorp, PrefSure Life, and Beazley Plc. Les is also one of the founders of Australia’s newest life insurance […]

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23.7.2021

Sector Dashboards July 2021

Our monthly dashboards cover seven key sectors of focus, with each sector built up by several subsectors that cover similar companies based on; products, end markets, services, assets classes or other characteristics. The publications include all companies listed on the Australian Stock Exchange that are actively traded and covered by research analysts, and hence have […]

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19.7.2021

InterFinancial’s EOFY in Review

13 Transactions 9 Strategic Transactions 4 PE Investments Looking back on FY21, InterFinancial and IFL Ventures would like to congratulate each of our valued clients on the successful completion of their transactions. The period was a record for InterFinancial where we successfully completed 13 transactions involving both strategic investors and private equity investors. Our team welcomes […]

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15.7.2021

Alliance looks to integrate APCI

Alliance Automation, the industrial automation and electrical engineering company has acquired 100% of APC Integration, the Adelaide-based firm which has been delivering electrical and automation solutions across Australian and International markets for 37 years. InterFinancial previously advised ERM Power in their 50% acquisition of Alliance Automation and has now advised Alliance on the acquisition of […]

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