What young BVers need from veteran practitioners

An interesting session—the first we’ve seen anywhere—was a panel of young valuation experts giving their perspectives on the profession. The session was at last week’s Business Valuation & Financial Litigation Super Conference hosted by NACVA.

Soft skills needed: How to communicate with clients effectively is one thing the panel members all agreed they need more help with from their veteran colleagues. The young generation of valuers are very tech-savvy, but interpersonal skills are a different story. Interacting with clients effectively is an acquired skill that needs to be passed down to the new generation of valuers. This can be done through some explanation, but the best way is to teach by doing—experienced experts should include young colleagues in site visits, client meetings, copy them on correspondence, invite them to a client lunch, or anything else where they can observe how to build rapport. This will go a long way toward developing young talent, the panel noted.

Bob Lewis (Visionary Group) moderated the panel of up-and-comers: Ashley DeCress (Marcum), Kevin Foyteck (ABIP), Mary Fernandez (Bodine Perry), and Dalton Hopper (BMSS). The panel made some other interesting comments, and there will be a full recap of this session in the October issue of Business Valuation Update.

Takeaways from NACVA’s ‘super conference’

BVWire traveled to Salt Lake City for the Business Valuation & Financial Litigation Super Conference hosted by NACVA. It was great seeing people in person, and a lot of interesting information was presented. We’ll have a detailed recap in the October issue of Business Valuation Update, but here are some takeaways from both in and out of the sessions:

• Continued court backups are pushing more cases to mediation, which represents an opportunity for valuation experts (e.g., take the mediation training and get on court-appointed lists);

• One firm is solving the recruiting problem by hiring undergrad students part-time;

• Zoom is “here to stay” for litigation up to and including depositions—trials will migrate back to in-person;

• Speakers in several sessions told attendees they were not charging clients enough—and that fees should be based on the value to the client, not billable rates;

• NACVA has a “Leadership Track” designed to give members the opportunities to advance in the profession;

• Private equity will soon own more than half of the top 20 accounting firms, predicts an M&A consultant in this space;

• For cannabis firms, valuation fundamentals apply—but company-specific risk ranges from 15% to 25%;

• Use the “bookmarks” function in Adobe for your valuation reports to make it easy to navigate—headings in Word can become bookmarks when you convert to PDF;

• Offshoring is a model whose “time has come” because many practitioners have become so busy that they can’t devote enough time to managing the firm; and

• Artificial intelligence will take hold in auditing and then move into forensic accounting before it spreads to valuation.

We’ll have more takeaways in next week’s issue!

2022 Pepperdine report on private cost of
capital released

A preview of the “2022 Private Capital Markets Report” was presented at the NACVA’s Business Valuation & Financial Litigation Super Conference last week. The report is the result of a project at the Pepperdine University Graziadio Business School that conducts an annual survey of expected rates of return with respect to private companies. Respondents include senior lenders, asset-based lenders, mezzanine funds, private equity groups, venture capital firms, angel investors, privately held businesses, investment bankers, business brokers, limited partners, and business appraisers.

At the conference, Dr. Craig Everett, the project’s director, discussed the report and handed out the full 2022 report to attendees.

Latest ranges: Bank loans have the lowest average expected returns (a median return of 4.0% to 6.0% depending on loan size) while capital obtained from angels has the highest expected returns (ranging from a median of 33% for later-stage financing to 43% for seed money). The full report contains details on each type of funding and at various levels. The “money shot” is a grid chart showing the ranges of returns the various respondents expect at various levels.

The 2022 annual report is available for purchase if you click here.

Hitchner’s wrath continues regarding Damodaran’s attacks

Speaking at the NACVA’s Business Valuation & Financial Litigation Super Conference last week, Jim Hitchner (Valuation Products and Services) continued his strong rebuttal of some severe criticisms Aswath Damodaran (New York University Stern School of Business) made during a recent BVR webinar about certain inputs to the cost of capital (see prior coverage here). “He’s attacking our profession,” Hitchner noted, and he will continue to vent his anger at the upcoming AAML/BVR Divorce Conference in Las Vegas (September 18-20), so the fireworks will continue! Hitchner will co-present two sessions: How to Attack and Defend the Databases Valuation Analysts Use and Ethical Quandaries: An Interactive Session. The AAML is the American Academy of Matrimonial Lawyers. Conference attendance is expected to be half experts and half attorneys. To see the full agenda and to register, click here. Up to 20 CPE/CLE credits are available.

Future editions of USPAP will have no end date

The current edition of the Uniform Standards of Professional Appraisal Practice (USPAP) will be extended by one additional year, according to an announcement from The Appraisal Foundation’s Appraisal Standards Board (ASB). The 2020-2021 USPAP will now be effective until Dec. 31, 2023. Also, future editions of USPAP will have an effective start date but no end date, the announcement says. “This will give the Appraisal Standards Board greater flexibility to fully examine potential revisions to the standards and respond in a timely manner to changes in the valuation profession.” This change will not impact requirements for appraiser continuing education.

Reminder: Please take a short survey on financial benchmarking data

Our thanks to those of you who took our very short survey (four questions) on the sources valuation analysts use for financial benchmarking data. If you haven’t taken the survey, it will just take a few minutes and we would greatly appreciate it. All responses are anonymous and confidential. You can take the survey if you click here. Thank you!

Sustainable value is the focus at the IVAS-IVSC conference October 6-7

The leading business valuation conference in Asia Pacific has been the IVAS-IVSC Business Valuation Conference, and the next one will be October 6-7. The focus will be on new strategies to safeguard sustainability, such as environment, social, and governance (ESG) factors. The Institute of Valuers and Appraisers, Singapore (IVAS) organizes the event in partnership with the International Valuation Standards Council (IVSC). Sponsors and supporting partners include the Big Four and valuation professional organizations including RICS, AICPA, and the CBV Institute. For more information and to register, click here. Early bird pricing is available until September 9.

BV movers . . .

People: Anneliese Scherer, CPA, has joined Fiske & Co. as the new forensic and valuation services manager; the firm is a boutique women-owned accounting, financial forensics, valuation, and litigation consulting firm … Andrew B. Frew, ASA, ABV, has joined Mercer Capital in its Houston office as a vice president; he has over 20 years of business valuation experience with businesses and business interests for financial reporting, gift and estate tax, corporate tax, corporate M&A, and employee stock ownership plan purposes.

Firms: New York-based EisnerAmper LLP is adding Minneapolis-based Lurie LLP, a firm with 24 partners and more than 200 employees who provide accounting, audit, tax planning, and wealth management services to clients in a wide variety of industries, including healthcare, professional services, technology, manufacturing, real estate, and more … Geffen Mesher of Portland, Ore., is adding Vierck & Rakoski CPAs PC of Vancouver, Wash. … Boston-based WilliamsMarston LLC has acquired Paradigm Advisory Group LLC of Atlanta, a boutique advisory firm that provides financial and accounting advisory solutions to private equity-backed and public companies.

Please send your professional and firm news to us at editor@bvresources.com.

CPE events

• Valuing Cannabis 2.0: Buckle Up, This Is About to Get Interesting. August 24, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Ronald L. Seigneur (Seigneur Gustafson) and Ryan Cram (Seigneur Gustafson). CPE credits: 2.0.

This webinar deals with recent trends in valuing businesses and intellectual property in the cannabis industry.

• Spotlight on the Jewelry Industry: Are Diamonds Still a Girl’s Best Friend? August 25, 10:00 a.m.-11:40 a.m. PT/1:00 p.m.-2:40 p.m. ET. Featuring: Lynton Kotzin (JS Held). CPE credits: 2.0.

The speakers present an overview of the current state and evolution of the jewelry industry, including key value drivers, accounting issues, and the proper application of the different valuation approaches.