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Webinar Course Description
This webinar provides an introduction to the fundamentals of valuation for
complex financial instruments and interests in private equity, venture capital,
and other privately-owned companies. Valuation of complex financial
interests are required for financial reporting, tax, planning, portfolio
valuations, investor reporting, shareholder transactions, and disputes. The
knowledge and skills needed to successfully value complex financial instruments
requires special skills and knowledge that go beyond basic business valuation
methods, approaches, and techniques.
Participants will learn the basics of capital structure analysis and key
features of different categories of financial instruments. They will find out
how economic characteristics, capital structure and risk factors define
value. The types of financial interests covered will include senior debt,
sub-debt, convertible debt, preferred equity, rollovers, options, warrants,
profits interests, phantom shares, appreciation rights, and hybrid
instruments.
Discussion will cover concepts and approaches to the
valuation of complex financial interests including the valuation process,
information required, capital structure analysis, waterfall mapping, and option
fundamentals. This session provides an overview and introduction to fundamentals
of valuation methods of complex financial instruments including Black Scholes,
OPM Backsolve, Binomial/Lattice, Market, LBO, and Monte Carlo. A deeper dive
into these methods will be provided in Part 2 of this series. In addition, we will cover how to
identify clients and opportunities where the valuation of complex financial
instruments can help expand your skills and valuation practice.
Recommended Pre-Reading
“AICPA Accounting & Valuation Guide, Valuation of Privately Held Company
Equity Securities Issued as Compensation (2013)” [AICPA]
“Valuation of Portfolio Company Investments of Venture Capital and Private
Equity Funds and Other Investment Companies”, [AICPA]
“Options, Futures and Other Derivatives, 9th Edition”, John C. Hull; “Capital
Markets, 5th Edition, Institutions, Instruments, and Risk Management”, Frank J.
Fabozzi.
Course Audience
This course is intended for all levels of business
valuation professionals who would like to learn more about complex financial
instruments, the specialized valuation methods required, and are looking to expand skills and professional services in this area.
Instructor Information
David Howell, ASA | Principal | Plante
Moran
David is a Principal at Plante Moran in Chicago,
Illinois. He has over 25 years of experience in the valuation of privately-owned
companies. He specializes in complex securities, equity compensation, and
transactions. David has an MBA from the Kellogg School of Management,
Northwestern University and a B.A. Economics, from Northwestern
University. He is an Accredited Senior Appraiser (ASA) in Business Valuation, American Society of Appraisers.