The Trifecta of Value: Cash Flow, Risk, and Growth
Nobody really needs it, but almost everybody knows E=MC²—Einstein’s formula for relativity. It’s a concept that sticks, even if most people don’t fully understand it. The same could be said about valuing companies. From Discounted Cash Flow (DCF) models to multiples-based approaches and asset valuations, countless methods claim to crack the code for determining value. […]
Why Discounted Cash Flow Models are Rare in German M&A
In 1999, I studied Corporate Finance at London Business School, eager to uncover the magic behind valuing companies. Back then, the Discounted Cash Flow (DCF) model was considered the gold standard. It took me nearly six months to fully grasp its intricacies. Fast-forward 25 years and after participating in hundreds of M&A valuations in Germany, […]
Angels & Advisors
Recent discussions with German M&A firms show that the number of SME deals have significantly dropped in the last few months. A survey in May showed that 85% got stalled or stopped. Partially because business plans have turned havoc with Corona, partially because price expectations have diverged. Any other reason also works for an explanation. […]