Equity Value Enhancement: A Tool to Leverage Human and Financial Capital While Managing Risk

Praise for
Equity Value Enhancement

"The foundations of wealth creation and preservation are not as well understood as one might think. It takes special wisdom and a keen grasp of risks and opportunities to master value creation. Dr. Carl Sheeler combines both an analytic knowledge and practical wisdom in Equity Value Enhancement. Carl is able to help advisors and owners avoid the trap of knowing ′the price of everything and the value of nothing′ (to quote Oscar Wilde). Carl demonstrates a holistic approach to reflect how financial and human capital, when yoked together, yield uncommon results. A welcome read."
David Teece, PhD, Chairman and Principal Executive Officer, Berkeley Research Group, LLC

"Equity Value Enhancement represents a distinctive view of valuation presented within a tight, comprehensive context relevant to executives, professional advisors, and business owners that want ′to lead the herd.′ In this book, Dr. Carl Sheeler demonstrates his many years of experience and high–level technical expertise reflecting strong quantitative grounding, precision of thought, and high–level insights into risk management and value creation. This highly readable resource reflects a deep understanding of the marketplace and discusses pragmatic approaches to enhancing value and building win–win relationships. This is a must–read for those who truly want to excel and make a difference."
Thomas J. Handler, JD, PC, Managing Partner, Chairman, Advanced Planning & Family Office Practice Group, Handler Thayer, LLP, Attorneys and Counselors at Law

"At a time when valuation opportunities are becoming more and more commoditized, Carl provides a beacon for service professionals to follow. He identifies a path through the shifting sands of fee negotiations and the hard–core sale of services, as well as outlines the value drivers and best practices in value–added professional services where intangible assets are of primary concern. He provides real solutions for meeting and exceeding the needs and expectations of potential clients as well as their other professional advisors. I can already see that Equity Value Enhancement will become a must–have resource for any practitioner involved in the valuation and business consulting services area."
Lari B. Masten, MSA, CPA/ABV/CFF, CVA, ABAR, MAFF, Founder and Managing Director, Masten Valuation, LLC, Denver CO

"One of Mr. Sheeler′s objectives in Equity Value Enhancement is to challenge appraisers to think differently about their purpose, actions, and outcomes. He integrates several schools of thought in the process, from technical concepts to a more holistic focus on serving in a ′trusted advisor′ capacity. It is evident in the specificity of his content born from decades of experience and thousands of projects that he has, in fact, achieved this objective. This book is a compelling wake–up call for our profession."
Brent Uken, CFA, ASA, Principal, Transaction Advisory Services, Ernst & Young

"Why do innovative companies fail to meet their growth objectives? How do generations of equity vanish from successful family businesses? Why do so many acquisitions fail to create the value outlined in the terms of the plan? With Equity Value Enhancement Carl Sheeler has provided a much needed, holistic perspective on risk mitigation, and value growth and preservation. Sheeler′s techniques are astute both emotionally and financially. Equity Value Enhancement is as compelling and enlightening as it is authoritative."
Bill Williams, Regional Sales Manager, U.S. Service Provider, Cisco Systems

Foreword

Preface

Acknowledgments

Chapter 1: Value ABCs

Capital and Risk

Understanding Assets

Plugging the Gap

Notes

Chapter 2: Focus on Trusted Advisors

The Path to Being the Best

Question Yourself

Taking It to the Next Level

Notes

Chapter 3: Focus on Business Owners

The Role of Advisors

The Cost of Bad Advice

The Value of Leveraged Knowledge

Engaging the Best

Practical Vetting Suggestions

Size and Scope Considerations

Setting Expectations

Note

Chapter 4: Risk in the Eye of the Beholder

Inexperienced Business Appraiser Lenses

CPA Lenses

Attorney Lenses

Investment Banker/Business Broker/Business Intermediary Lenses

Commercial Banker Lenses

Insurance Professional Lenses

Wealth Manager/Financial Advisor/ Fiduciary/Trust Officer Lenses

Research on Risk & Returns

Economist Lenses

MBA/Ph.D./CFA Lenses

Owner/Family Lenses

Family Business Advisor Lenses

Staff/Vendor Lenses

Client Lenses

Notes

Chapter 5: The Role of Governance

Governance

Focus on Culture

About Boards, Governance & Strategy

Healthy Board Governance & Strategy Creates Value

Strategy & Equity Value

Family Harmony & Legacy as a Governance Driver

Board Strategy & Governance Creation

Why Governance is Needed

Board Structure & Member Traits

FO Governance & Risk Management

Qualitative Valuation Measures

Taking Control

The Secret Sauce

Governance Measurements

Governance Takeaways

Notes

Chapter 6: The Role of Relationships

Client Relationships

Advisor Relationships

Commercial Bankers

Investment Bankers

Insurance Agents

Wealth Advisors

Board of Directors

The Bottom Line on Free Advisors

Accountants

Attorneys

Fractional CFO

Family Relationships

Shareholder Relationships

Vendor Relationships

Community/Legislative/Philanthropic Relationships

Notes

Chapter 7: The Role of Risk

Financial & Legal Oriented Risk

Commonly Missed Risks

Final thoughts

Notes

Chapter 8: The Role of Risk

Operational Related Risks

Operational Related Risks

Chapter 9: The Role of Knowledge

A Matter of Culture

Healthy Knowledge

Be Transparent

Encourage Two–Way Communication

Knowledge and Human Capital

Knowledge Measures

Notes

Chapter 10: Valuation versus Value Creation ( GRRK )

Software and Rules of Thumb

A Personal Aside

Collaboration, Cohesion and Transformation

Notes

Chapter 11: Putting It All Together Four Vignettes

Vignette One – What the 2009 financial crisis can teach us it s about relationships

Vignette Two The trees and forest syndrome

Vignette Three The Path Not Taken

Vignette Four Putting it All Together (Strategy, Human Capital and Finance)

Recommended Reading

About the Author

Index

CARL L. SHEELER, PHD, ASA, is the managing director and global group leader of family office and business strategies at Berkeley Research Group, LLC an 900+ staff global business litigation and advisory services firm. He is also the founder of Business Valuations, Ltd./Allison Appraisals & Assessments, Inc. and co–founder of Privatus CI3O Services, LLC. He has performed more than 1,200 high–profile litigation, valuation, and restructuring engagements from midmarket to national companies. He has testified more than 170 times on matters ranging from IRS taxpayer to shareholder disputes and assisted hundreds of clients on the measurement, creation, management, and defense of more than $50 billion in values.

Carl is also a Manager of the Two Bears Ranch, LLC, formed to receive the proceeds from the sale of this book which will be used to serve combat PTSD veterans and at–risk horses and dogs. They will be healed through equine and canine therapy. Donations, grants, and ranch operation revenues will also subsidize this cause. If interested, contact Carl at his website at www.carlsheeler.com or www.twobearsranch.com.