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Services
Valuation
The economic value of your Company will be calculated using methodologies such as: Discounted Cash Flow with long-term growth (Discounted Cash Flow - DCF), Analysis by multiples of similar companies (Market Multiple Approach – MMA) and the return expected by the investor (Venture Capital Method – VCM)
The DCF aproach focuses on estimating the free cash generation that investors expect in the near future, say five to ten years. After this period, a perpetual growth rate is estimated for the terminal value. Various scenarios are developed including sales projections over five/ten years, cost and expense projections, etc. The generation of free cash will be brought to present value by different rates of return which will incorporate, to the risk-free return, market risk premium amplified by the sensitivity of the segment/sector in which the company is inserted (β: beta), premium for the size (size premium) among other prizes that are necessary (case by case). In this way, we will have a First Matrix of Value for your Company as a product.
MMA is one of the most popular valuation methods. In the analysis by multiples of similar companies, recent acquisitions in the market in segments similar to your Company will be considered, as well as the market value of companies traded in liquid markets, such as market value on the stock exchange in relation to sales, profit, EBITDA, among others (according to the stage of the company).
VCM takes into account the returns that investors expect to obtain on their exit, that is, on carrying out their investment (exit rates).
Negotiation
Strategies
We will identify alternatives to maximize the value of the entrepreneurs' financial and strategic position. Financial instruments (derivatives) and control rights instruments will be contemplated in this phase of the deal.
Shareholders
Agreement
The terms of the deal go beyond value matters. The preservation of some control rights is just as important as value maximization. A smart shareholder agreement is vital to the stability of the relationship.
Based on the Theory of Contracts, we will seek to mitigate agency risks (moral hazard and information asymmetry -https://youtu.be/wTM9Ytw_JD0) in order to reduce as much as possible the dilution of its control rights. We also aim to create mechanisms so that the control rights that will be shared with investors (venture capital and private equity funds) do not bring vulnerability to its medium/long-term strategic position.
Vesting
Programs
CFO4U
A new management, a new time
Your team needs the right incentives. Incentive programs (vesting programs) based on stock options are a strategic tool for the commitment and retention of talent. In addition, they prevent you from “delivering for free” part of your equity. These incentives must be done intelligently, especially in companies in the initial stage of maturation.
The organization and knowledge of a C-Level manager, but with costs on demand: this is the proposal of this innovative service by Risicare.
Count on a structured service, in the consulting model, which operates within your budget reality to bring control, strategy and results to your business. For more information contact us.