Important Valuation Issues and Concerns

• When will I get my money back?
  – If, and how?
  – What is the payoff?
  – Positive outlook for the business is critical
  
  
• Will there be interim distributions of profits or dividends or will I have to wait until the business is sold to get your money back?
  – Total Return Concept (Dividends + Capital Appreciation)
  
  
• When will I exit the investment?
  – Three to five years?
  
  
• How will I exit the investment?
  – Sale to a third party buyer, IPO, merger with another company
  – Corporate redemption or buy back of shares
  
  
• What is my rate of return requirements?
  – This should be based on the level of riskiness (or uncertainty) associated with the future cash flows of the business
  – Should I be concerned about the investment and getting my money back?
  – Price I will be willing to pay for a company will be driven by its expected returns

Comments

[John Small II]

Joshua: Congratulations on getting a new job

and persisting. Wondered if you wanted to talk

about it on WLPO Radio either live Friday ...or

record something for use on Sunday? Here's

my email address: js2@wlpo.net

Thanks for your consideration. We're about

halfway between the Mississippi River and

Chicago along I-80.

John Small

[Keely C.]

Hello Mr. Persky!

I read an article about your "sign board" endeavor and wanted to wish you congrats on your success!

As a recent college graduate (my degree was in Public Relations -- usually the first field to get the corporate "axe" these days), I certainly feel your pain. After months of interviewing and countless letters explaining that job openings were cancelled as a result of "budget cuts," I recently launched my own PR organization.

The next few years will undoubtedly yield more learning opportunities than I've ever known. That said, I've landed several clients and am optimistic that with enough dedication and hard work, I'll be able forge my own path, as did you.

Again, congratulations and best of luck!!

[Jayvee Caintic]

Congratulations on you new job! You have inspired us to keep going. Thanks to people like you, we have come to believe in the human spirit once again.