convert your story into a number.So let me use a very simple example to kind illustrate this.I want to pick somebody who’s never done a valuation before.And we’re going to do some Valuation .Anybody who’s never done a valuation before?OK, you can be my Guinea pig.I can’t move too far away, because Have to be on the camera.But this is an empty envelope.I’m not David Copperfield, no magic tricks. www.valsnsw.com.au
So here’s what I’m going to do.I’m going to put a $ bill.It’s a little crumpled, but it’s legal tender still.How much should you pay for this envelope?Don’t think too long.That’s what gets us in trouble.AUDIENCE $SWATHS RANDOM First rule in valuation,if you pay $ for an envelope with $, you get nothing.So let’s try again.How much should you pay for this envelope?AUDIENCE $SWATHS RANDOM Go $you never know what disease I have.I might not be able to read numbers.First rule in valuation– if you know the value of something,don’t throw it on the table.You know the value of a company.Don’t offer that value up front.
Because then what do you have left for yourself?Put it in your back pocket, start really low,and then build up.But this is such a transparent asset value,that if I put it up for a bidding war,my guess is, by the end of the bidding,you’d probably get pretty close to $now I’m going to make it interesting.What is this going card say?AUDIENCE Control.SWATH RANDOM Control– I’m going to put control into this envelope.How much should you pay for this envelope now?It’s got control in it.You know what?I tried this in investment bank last week.In investment banks, you’re trained.If you put a control into a company, there’s a % premium.
I don’t know where that came from.The guy offered me $II sold it.He thought it was a game.I said, no, no, no, no, this is a real transaction.Pay me the $so guess what he’d done?He paid $ for a three by five card that I stole from NU, that cost me absolutely nothing.This is a money machine.Now that I know you like to pay for three by five cards with nice sounding words, I can say, try more.What does it say?AUDIENCE Synergy.A SWATH RANDOM Synergy– that’s a big one.I’ll throw that in there.That will probably go to.