Valuation World Cup: Quarterfinal 2 – Financial Powerhouse Upset!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

Knockout round play continues!

Matchup:

Group A Winner (Adjusting the Average) vs. Group B Runner Up (EV/EBITDA)

Highlights:

While superpowers march headfirst into one another in the World Cup, here at C:V in the Valuation World Cup we love an underdog. Adjusting the Average pulled out to an early 1-0 lead. After all, they were our group stage Angel winner and are situated nicely for pre-revenue, let alone pre-earnings, companies. Late in the second half, early favorite EV/EBITDA finally clicked and looked to have that late-round prowess, but never could find an equalizer. That push left little doubt that, had this game gone into extra time (or gone public), they would have moved forward… but too little, too late for this competition. This matchup draws comparison to Germany’s parked bus after a 13’ goal against the French. Plenty of Benzem-ian efforts for EV/EBITDA, but like him, they will be watching the semis from their couches.

Outcome:

EV/EBITDA 0-1 Adjusting the Average

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Valuation World Cup: Quarterfinal 1 – EV/Sales Cruises to Victory!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

win or go home

And so begins the knockout stage!

Matchup:

Group B Winner (EV/Sales) vs. Group A Runner Up (Recent Transactions)

Highlights:

Unlike the World Cup’s Quarterfinals, each of which were decided by a goal or less, the Valuation World Cup features a runaway game. EV/Sales and Recent Transactions looked evenly matched through the first 30’, as both are useful for very early stage companies. Then EV/Sales started piling it on, as both rely on comparables, but EV/Sales calculates value based on that company’s expected performance, not based on others’ past successes. By tying the valuation to revenue goals, you can track the increase in value with the company growth. A bit like Sneijder and co. providing a late push against El Tri, EV/Sales proved to be the fitter squad throughout.

Outcome:

EV/Sales 3-0 Recent Transactions

Monday Evening Memo

nyc_fireworks

Happy Monday!  Due to the Fourth of July weekend we are getting the C:V. MMM out a bit later than normal. Check below to see what happened last week and what you can expect this upcoming week!

Recap of Last Week: Last week we closed out the Group Stages of the Valuation World Cup!  Group C and Group D were featured.

What Lies Ahead: We have a full week of Valuation World Cup ahead!  Expect to see us finish out the tournament to coincide with the Finals this weekend!  We will also have some news upcoming about the future of the site and some planned downtime (re: vacation). Stay tuned!

Valuation World Cup – Group D Winners Revealed!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

Group D – The BEST of the REST collide!

Game 1: Ownership % 1-3 Acquisition Value (Attach Rate)
Game 2:  EV/Patent 1-1 Exit Multiple
Game 3: Ownership % 2-2 EV/Patent
Game 4: Acquisition Value (Attach Rate) 2-0 EV/Patent
Game 5: Exit Multiple 1-2 Ownership %
Game 6: Acquisition Value (Attach Rate) 4-2 Exit Multiple

GROUP D 1

Closest Match
EV/Patent and Exit Multiple and their commitment to simplicity really did them in this game in that neither could take the upper hand.  EV/Patent was able to get an early goal, but much like its name, it was a bit of a one-trick pony in that it didn’t have much else to offer. Think Drogba on Ivory Coast but sans the victory in the end…

Exit Multiple was able to get an equalizer but could not find the game winner as it was too rooted in its single-minded focus of investor return at exit that it could not keep its mind on the game at hand.  Think the first 55 minutes of the Netherlands Australia game

Biggest Blow Out
Although the score was 4-2, Acquisition Value (Attach Rate)’s sheer dominance of Exit Multiple did not show through on the score line.  Exit Multiple was completely outclassed at all stages and were only able to get on the board with a questionable penalty given and then a stoppage time garbage goal.  Had Exit Multiple’s keeper not put on a Tim Howardian performance, the score would have been much worse.  Attach rate won the game on their ability to accurately depict true value for their shareholders while exit multiple got lost in the end game and could barely find the field as a result.

Memorable Moment
Less of a moment, and more of the entire group round performance by Acquisition Value (Attach Rate).  They look exactly like the early tournament favorite that so many have predicted and are peaking at exactly the right time.

Valuation World Cup – Group C Winners Revealed!

*Editor’s Note: Keep up to date on all things Valuation World Cup here!

Group C – The Customer is ALWAYS right

EV/LCV and EV/MAU advance!  Each team had their struggles as the group as a whole was fairly well-balanced.  Full results below!

Game 1: Churn 1-1 EV/LCV
Game 2: EV/MAU 2-0 Market Size/Share
Game 3: Churn 1-1 EV/MAU
Game 4: EV/LCV 2-0 Market Size/Share
Game 5: EV/LCV 4-1 EV/MAU
Game 6: Market Size/Share 3-2 Churn

Group C

 

Closest Match
Churn and EV/LCV played to a spirited draw in the opening game of Group C.  Both teams had their chances, but in the end neither could come away victorious.  Much like how it struggles to be a standalone metric when valuing a company, Churn could not muster enough power to win the game alone. Similarly, EV/LCV could not overtake Churn because of its dependence on other metrics for a strong valuation with one of the most important ones being, you guessed it, Churn.

Biggest Blow Out
EV/LCV really took it to EV/MAU in what became the battle for 1st place.  EV/MAU lived up to their Jekyll and Hyde mantra in that some games they looked unbeatable, and others they seemed unworthy of having qualified.  This game was the latter.  EV/MAU looked completely out of sorts and EV/LCV had clearly built on its draw against Churn and really utilized their entire starting XI to full capacity and as result coasted to a convincing victory.

Memorable Moment
With both teams already eliminated from advancing, Market Share/Market Size showed great resolve in coming from down 2-1 to defeat Churn 3-2. They were able to make a 2nd half adjustment to their TAM and find the appropriate market share needed which gave their investors full confidence in the management team to invest with a capped liquidation preference rather than a fully participating one and this newfound freedom propelled them to the win!