Private company clients turn to CBVs as a source of expertise in business strategy and planning, financial modeling and the preparation and evaluation of business plans and financing proposals.
Valuators perform various roles in private company finance, including:
· Acting as a financial advisor to clients who are seeking financing to expand or restructure the business or acquire a business;
· Working as part of a management team of a company seeking financing and/or a strategic partner; or
· Working with a company or institution that provides financing to businesses.
This elective course covers the entire process of private company finance, discussing in detail the four key stages – business planning and financial modeling, structuring, raising capital, and loan agreements. The course is offered entirely online, including course notes with live links for references and required readings, group discussions, audio/slide segments, an assignment and a comprehensive case study.
Module 1: Business Planning and Financial Modeling
Whether acting as an advisor or as one of the parties seeking or providing financing, the valuator needs to have a comprehensive knowledge of the many aspects of the private company financing process.
This module discusses:
· The feasibility assessment of a private company’s financing options
· The components of a business plan and financing proposal
· Assessing the business plan and financial proposal
· Financial modeling including assessing the value drivers assisting in the preparation of a forecast
· Conducting a sensitivity analysis
· Connecting business strategy with the appropriate financing options
· Working with professionals such as bankers, lawyers and other financial advisors.
Modules 2 and 3 provide a 10-step “roadmap” to illustrate the deal-structuring process.
This module focuses on financing for growth through acquisition or for upgrades, expansion or new product launches. The module serves as a bridge between the strategic direction developed in Module 1 and the actual capital-raising process outlined in Module 3.
This module discusses:
· Positioning the business for financing
· Determining the financing needs and appropriate sources
· Credit assessments
· Determining the optimal capital structure for the transaction
Module 3: Raising Capital
In addition to traditional lending sources, private companies can seek financing from a wide variety of sources. The intent of the capital raising process is to ensure that a company is properly prepared, packaged and presented to the appropriate credit markets.
This module discusses:
· Capital structure options
· The various valuation considerations
· Ownership structures and voting rights considerations
· Modeling an investment return
· The development of marketing documents and proposals
· How to identify and approach potential investors.
Module 4: Negotiations and Loan Agreements
Modules 1 to 3 discuss steps 1-10 in the process of developing the financing proposal and the role of the CBV. The CBVs role is especially crucial in the final three steps of financing a business: negotiations, legal/loan agreements, and after the deal considerations and follow-up.
This module discusses:
· The specific factors that need to be addressed when negotiating with lenders, equity providers or alternative financiers as well as the considerations during the drafting of legal and loan agreements and after the deal is completed
· Additional negotiations and documentation considerations within the acquisition process for leverage buy-outs and mergers
· Specific considerations for divestitures, whether an owner-manager wants to completely exit a business or a public company wants to dispose of a division subsidiary or product line
Module 5: Special Topics
This module comprises only required readings. The selected chapters focus on financing in five sectors: Oil and Gas, Limited Partnerships, Agriculture, Real Estate Development/Construction, and Financing in the United States.