I recently participated in a complex divorce case, where a previously thriving e-Gaming business (owned by the husband) was being presented to the court as though it was in financial dire straits.
I was approached initially by the wife, to help unravel the true financial standing of this company, as neither party could agree on the value.
The complexity arises from the fact that e-Gaming is a relatively new growth industry, so trying to establish a comparable business value and future prospects required some expert detective work.
How do I value a business that’s part of an emerging industry?
- I study market sources to gauge how the business was performing relative to its peers. (In this case, the external financial records showed the business had been growing well recently.)
- I question the financial picture being presented and analyse the discrepancies to identify irrefutable examples of value and identify areas where further information and understanding is required.
- I speak to experts within the industry, to find out more about the nuances of the industry, to ensure that our valuations consider any unusual factors.
This case did end up in court, and I was testified as an expert witness, as agreed by both parties.
As a result of my expert report, and by testifying in court under cross examination, the judge was able to understand the issues and to determine a fair and true outcome that both parties were able to agree to.
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