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Suggest who benefitsEp. #296 - Pepperdine University Capital Markets Study on Private Company Valuations
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Suggest questionDr. Craig Everett is on the show today to dive deep (in a way that a normal business owner can understand) into the world of valuations, where they come from, and how the research he leads at Pepperdine University is helping shed light on the middle and lower private markets.
Dr. Craig Everett is a finance professor at Pepperdine University and contributor to the Pepperdine Private Market Capital Projects and Executive Director for the Pepperdine Most Fundable Companies. In this episode, Dr. Everett explains why it's important for every business owner to understand their cost of capital, why weighted average cost of capital (WACC) matters, and why multiples are so high right now in the M&A space. Expand your financial literacy and learn more about how to view your business as a financial asset in this episode with Dr. Craig Everett.
WHAT WILL YOU LEARN:
-Why it’s important, as a business owner, to understand how to value a business while you own it.
-What drove Dr. Everett to teach finance after years of consultant work.
-What cost of capital truly means and how to use it as a rule of thumb to determine whether you are growing the value of your business or if it is in decline.
-How your weighted average cost of capital (WACC) fits into clearly understanding your multiple.
-Dr. Everett’s definition of Company Specific Risk and all the factors that go into it.
-Why venture capitalists are moving back to early stage companies.
-Why multiples are so high right now.
-Why your valuation varies depending on the exit you are taking.
-Why people are choosing an exit to a private equity deal versus IPO.
PODCAST INTERVIEW QUOTES:
22:30 - “I want my students to sit in on financial meetings and understand what’s going on.” – Dr. Craig Everett
25:30 - “What’s your cost of capital? It’s amazing how many people say zero.” – Dr. Craig Everett
44:10 - “The revenue multiples are crazy right now.” – Dr. Craig Everett
49:20 - “VCs are now moving back into early stage companies." – Dr. Craig Everett
56:45 - “They wanted to come up with a different approach to come up with the cost of capital." – Dr. Craig Everett
ABOUT CRAIG: In addition to being an assistant professor of finance, Craig Everett is also the director of the Pepperdine Most Fundable Companies Initiative, which is a prestigious national startup competition. He is the primary researcher and manager for the Private Capital Markets Project, which publishes a quarterly Private Capital Demand Index and Private Capital Access Index, leading economic indicators. Craig is one of the leading authorities in finance, specializing in private capital markets, entrepreneurial finance, venture capital, business valuation, and financial literacy.
About Ryan Tansom
Dr. Craig Everett is on the show today to dive deep (in a way that a normal business owner can understand) into the world of valuations, where they come from, and how the research he leads at Pepperdine University is helping shed light on the middle and lower private markets.
Dr. Craig Everett is a finance professor at Pepperdine University and contributor to the Pepperdine Private Market Capital Projects and Executive Director for the Pepperdine Most Fundable Companies. In this episode, Dr. Everett explains why it's important for every business owner to understand their cost of capital, why weighted average cost of capital (WACC) matters, and why multiples are so high right now in the M&A space. Expand your financial literacy and learn more about how to view your business as a financial asset in this episode with Dr. Craig Everett.
WHAT WILL YOU LEARN:
-Why it’s important, as a business owner, to understand how to value a business while you own it.
-What drove Dr. Everett to teach finance after years of consultant work.
-What cost of capital truly means and how to use it as a rule of thumb to determine whether you are growing the value of your business or if it is in decline.
-How your weighted average cost of capital (WACC) fits into clearly understanding your multiple.
-Dr. Everett’s definition of Company Specific Risk and all the factors that go into it.
-Why venture capitalists are moving back to early stage companies.
-Why multiples are so high right now.
-Why your valuation varies depending on the exit you are taking.
-Why people are choosing an exit to a private equity deal versus IPO.
PODCAST INTERVIEW QUOTES:
22:30 - “I want my students to sit in on financial meetings and understand what’s going on.” – Dr. Craig Everett
25:30 - “What’s your cost of capital? It’s amazing how many people say zero.” – Dr. Craig Everett
44:10 - “The revenue multiples are crazy right now.” – Dr. Craig Everett
49:20 - “VCs are now moving back into early stage companies." – Dr. Craig Everett
56:45 - “They wanted to come up with a different approach to come up with the cost of capital." – Dr. Craig Everett
ABOUT CRAIG: In addition to being an assistant professor of finance, Craig Everett is also the director of the Pepperdine Most Fundable Companies Initiative, which is a prestigious national startup competition. He is the primary researcher and manager for the Private Capital Markets Project, which publishes a quarterly Private Capital Demand Index and Private Capital Access Index, leading economic indicators. Craig is one of the leading authorities in finance, specializing in private capital markets, entrepreneurial finance, venture capital, business valuation, and financial literacy.