Business Valuation Services

An Affordable, Timely Business Valuation and Securities Pricing Report for Business Sales or Crowdfunding Valuations

Whats My Business Worth?

Whats the value of my business? An important question without an easy answer. The definition of market value accepted by most federal financing institutions is: the most probable price which a property should bring in a competitive and open market; under all conditions requisite to a fair sale; the buyer and seller each acting prudently and knowledgeably; and assuming the price is not affected by undue stimulus. That definition applies similarly to businesses. As a business owner (or entrepreneurial start-up), how do you determine the most probable price ... in an open market ... under the conditions requisite to a fair sale? The answer is: Not very easily and more than likely not by yourselfparticularly if you need a degree of reliability. Navocate provides affordable, timely business valuations for business sales or Crowdfunding securities pricing. Our valuation model, which we have evolved over several years, analyzes three primary business value drivers: 1. Sell-Side analysisan analysis of your companys financial statements (or projections) relative to a database of business sales in over 650 industry sectors. 2. Buy-Side analysisan assessment of how the future investment return may look based on different deal structures. 3. Soft-Side analysisan evaluation of the non-financial aspects of the business from management, to operations, to risks.

1. Sell-Side Analysis
Navocates approach to the Sell-Side analysis uses aggregated sales data in each business sector to define industryspecific multiples which are applied to revenue or measures of profitsuch as EBITDA. The analysis is done through a combination of industry databases and Navocates valuation model. Working with industry data is an accepted technique, as opposed to a more expensive and time consuming certified appraisal. A certified appraiser, on the other hand, will also look at how comparable businesses have sold in the past, analyzing recently sold comparables, and making adjustments for respective differences in valuation between the comps and the business under consideration.1 Whatever approach is used, a SellSide valuation compares the business to recent comparable business sales. But will a historical sales analysis tell you anything about how that business will cash flow for you?

Importantly, the buy-side analysis is not the same as a pro-forma. For example, Navocate needs to know the buyers specific investment goals and objectivespreferences such as cash injection, equity, leverage, and financingto determine the deal structure. With that information available, we model various (pre-tax) cash flow and profitability scenarios to determine the value of the business based on the buyers criteria and objectives. Different scenarios generate diverse results.

Why You Need Both Analyses

Lets pause for a moment to consider why you need both a Sell-Side and a Buy-Side valuation analysis: 1. A Sell-Side valuation is exclusively historical and backward looking. It contains no information about the future. 2. A Buy-Side valuation is solely future and forward looking. It gives you no information about the past. 3. You need both sets of information to make a reliable decision about the companys value in the marketplace. By prudent, we dont mean inappropriately shrewd. Prudent implies a reasonable meeting of the minds between both buyer and seller. If the Sell-Side and Buy-Side analyses are at odds with each other, its unlikely that a transaction will occur. A prudent analysis will help you understand if buyer and seller can meet in the middle for an equitable agreement and successful transaction.
return in relation to the overall investment.

2. Buy-Side Analysis
Thats where Navocates Buy-Side analysis comes into play. The Buy-Side (or investment) valuation analyzes how the business will perform for an investor or buyer based on their specific deal structure objectives. Different buyers (individual or corporate) approach investments with different strategies. For example, does the buyer prefer high-leverage with low-equity? Or does the buyer favor low-leverage with high-equity? Some prefer risk while others prefer security. Some prefer leverage while others prefer cash.2
1 Certified appraisals are more expensive and require much more time than Navocates valuations. 2 Leverage is the ability to use a small initial investment, credit, or borrowed funds to gain a high

3. Soft-Side Analysis
Soft Parameters are the oftenoverlooked dimensions of a business that can have an exponential impact on a companys successincluding: Experience Level: Has the entrepreneur done this in the past? Can s/he demonstrate prior industry success? Has s/he successfully built and exited a business before? Management Team: Is a seasoned management team in place? Do they bring diversified experience and varying points of view? Financial Controls: Is the company generating financial reports? Does anybody know how to read them? Does anyone actually read them? Are the reports used to identify issues, trends, problems, and opportunities?

Market Opportunity: Is this biotech or construction? Different market sizes and growth rates may be a limiting factor or present an exceptional opportunity. Advisory Board: Does management have regular input from an external board of advisors? Business Plan: Does the company have a written plan with definitive goals and procedures to reach these goals? These and other soft parameters significantly impact a companys valuation. Navocates valuation algorithms combine all three analyses into a single model.

important differences. Navocates model takes into consideration what stage your company is at when determining its business value.

Comprehensive Business Valuation Made Simple

Navocates valuation model analyzes three value drivers across three different company life cycle stages. The result is a valuation and securities pricing report that delivers an timely and cost-effective, third-party valuation of your business, an appropriate stock price range, and an explanation of the methodologies and rationale behind the analysisin an affordable, easy to read document.

Valuations for All Company Lifecycle Stages

We designed Navocates valuation model for three different stages of a companys profitability cycle: Pre-Revenue Revenue (without profit) Revenue (with profit)

What Are the Next Steps?

Click on a link below to select your companys growth stage, and sign up via DocuSign today: Pre-Revenue valuation. $500. http://navo.cat/VrK6ft Revenue without profit. $1,000. http://navo.cat/PNhR6X Revenue with profit. $2,500. http://navo.cat/Rz5v4N
More info: (888) 900-5866, Ext. 3
loan, banks and other lending institutions have their own accepted list of certified appraisers. Check with your financing institution. Q: Can Navocate business valuations be used for litigation support? A: No. We do not provide litigation support services. The cost of valuations used for litigation support generally start at $12k-15k. Q: Is this the same as a Do-it-Online valuation website? A: No. Were not in that category of input the data and receive a report. Someone on our team with a masters level of education and decades of business experience will conduct the valuation using Navocates proprietary model. Q: Do you appraise residential or commercial property? A: No. Because all real estate markets are local in nature, real estate appraisals need to be completed by someone who understands the local market.

While there is similarity between all three of these stages in terms of business valuation, there are also some
mandated under Title III of the JOBS Act. Q: Is Navocate licensed to conduct business valuations? A: While there are no state or federal licensing requirements for business valuation, Navocate is licensed as a business intermediary in the state of Florida. We provide business valuations to companies throughout the U.S. as part of our intermediary services. Q: Do you produce a certified appraisal? A: No. Navocates valuations are designed to provide an estimate of market value at a price point that is significantly less than that of certified appraisal, with a report generated in about one week instead of six to eight. We can provide that level of support. However, the cost is higher and timing is much longer. Q: Can Navocates valuation be used for a bank loan or other financing. A: While many private lenders may accept Navocates valuation as a basis for a

Q&A
Q: How much time does this require? A: After we have received all of the information from you, about two weeks. Q: Can Navocate value pre-revenue companies? A: Yes. Navocates approach is similar to how seed and early stage investors value investment opportunitiesenabling us to define value ranges for pre-revenue companies. Our estimates, however, are based on your pro forma calculations. We do not render an opinion as to the likelihood or reliability of the financial projections provided to us. Q: Can Navocate value unprofitable companies? A: Yes. Q: Can Navocate help me define share value for a Crowdfunding offer? A: Yes. Based on the final value ranges we can analyze share value and provide a securities pricing report as

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