The following is a starting point for the documents needed in valuing your business. Your BEAR appraiser may ask for additional documents and information as they work through the valuation. You can count on BEAR to keep your information secure and confidential.
- A brief description of the business, with a few paragraphs explaining some of the nuances, types of clients you serve, number of employees, and some details that will give us a flavor of the business.
- A copy of the Articles of Incorporation, plus any amendments, and any current Shareholder Agreement that may exist. If it’s a partnership, then the Partnership Agreement. If it’s an LLP, the Operating Agreement.
- Detailed cap table, including a vesting schedule for options and/or warrants
- Debt agreements for all outstanding debt (including convertible debt)
- The latest 5 years of annual financial statements or tax returns. We can make do with cash basis statements but accrual statements are much better for our purpose.
- Year-to-date financial statements (accrual basis income and expense, and balance sheet) up to the proposed valuation date.
- For each period, a list of any unusual income or expenses that are not normal, and are unlikely to be repeated (e.g., cost of moving, lawsuit, consultant, unusual travel, personal expenses, etc.). These will be used to adjust income to “normal, sustainable.” You will get a chance to review how this works out.
- A worksheet showing compensation for each owner paid by the business, for each year reported to us:
– What the owners were paid as salary or wages in each annual period, not counting distributions.
– Distributions paid out of retained earnings (not expensed).
– Any other owner compensation or perks.
- Income statement and balance sheet projections for the next few years. We do not need a lot of detail. If this task is too daunting, we can run projections based on their history, and then you or they can make adjustments.
- A summary of values from any real estate or equipment appraisals which have been performed within the last five years.