Whether it’s someone selling or buying a business, raising capital or planning an inheritance, it became clear to me that there was an urgent need for more affordable and rapid valuations.This has become even more relevant with the onset of the coronavirus pandemic when many SMEs are going through significant changes and urgently need to put a value to their business.
Sean Rule, the founder of EquityMaven, shares with us the journey...
EquityMaven is a valuation software as a service (SaaS) startup, delivering accurate business valuations online, at a fraction of the cost and time of traditional methods.
We got started with the concept in 2018, worked on product development through 2019, and launched earlier this year. It first started with a real-life pain point.
From my experience in an investment banking role at Investec, and I can speak on behalf of the team, that we have spent countless hours working through and using traditional valuations - taking weeks or months, and often thousands of dollars, to complete. With advances in technology today, and the proliferation of company data, we felt there had to be a way to get to a similarly accurate valuation range in a dramatically more time- and cost-effective manner. The result of that "itch" is EquityMaven - or at least the first market-facing version of it...
Business valuation. But super-fast, iterative and affordable. Our product is a robust, investment banking-style valuation report, derived in real-time from user inputs and assumptions. For only $99/month, users can download unlimited reports, updating or changing figures as their underlying reason/s for the valuation evolve/s (e.g., raising capital, selling the business, estate planning etc.).
Like any startup - there are many. But for us, the biggest challenge has been getting the product up and running. Turning our MS Excel-based models into a working online UX, which dynamically pulls live data from 77 000+ companies, across 400+ industries in 120 countries, to generate valuation reports in 50+ global currencies was not easy, especially for a team without in-house coding experience.
Operationally, very little. We are a completely digital business, and our team works remotely anyway.
Strategically, if anything, it has helped - because so many businesses have experienced dramatic shocks to their valuations, and owners (or investors or advisors to their businesses) are keen to understand the impacts, but are also more price-sensitive and time pressurised - so a rapid and affordable valuation service is more relevant than ever.
How did you prepare for the lockdown?Because we are fully remote/digital, we made no explicit preparations. If anything, it just accelerated our product development efforts, and sprint to market - we wanted to launch as quickly as possible, given the anticipated need for our services.
Probably noise. With everyone home under lockdown, and every business in the world trying to pivot to online presence or e-commerce fulfilment, all digital marketing channels are noisy.
Business owners (and their investors and advisors) are also busy struggling to survive, pouring huge energy into cost-cutting or revenue preservation measures, and/or relief programmes.So, as much as they may need to urgently need to know what they're worth, finding the time (and getting their attention) to help with a valuation can be tougher than normal.
Distribution! We want as many businesses to know about EquityMaven as possible. So we are not only marketing directly to owners, but also to their investors, advisors and other professional service providers (e.g., bankers, insurers, auditors, lawyers etc.) that work with large numbers of private companies.
In this light, we are actively seeking out strategic partners that either directly needs affordable, accurate and rapid business valuation services, or would like to offer such services as a value-add to their clients.
If you are able to operate, What steps are you taking to continue operating?Nothing out of the ordinary, as we are a digital business.
Absolutely. Mostly online, through social media like LinkedIn, which has proven super powerful to connect with our networks both locally and internationally.
Still difficult, at best with a gradual return to full economic activity. At worst, with regression into more restrictive levels of lockdown if Covid-19 cases spike. Even in the best case, we expect consumer sentiment to remain tepid, and behaviour to remain cautious, which will prolong the strain on most businesses (and their valuations).
Beyond the innovation we are bringing to market already - disrupting traditional valuation services - we are busy working on a "white label B2B" version of our product for "super users".
To illustrate - imagine a bank wants to offer all of its commercial (or even private) clients "free" valuation services as a value-add, but they want it to look and feel like a bank product.We want to build this solution, where a bank can benefit from our valuation SaaS but re-sell it to their clients as their own.
That even the most manual and expert services, like business valuation, which seem controlled by specialised professionals that charge high fees and take ages to complete their work, which appears unassailable by process automation and technology, can be challenged by software.
