Valuation Critical to Capital Raise

Data Centre (Pexels - Panumas Nikhomkhai)


  • Client needed a valuation before a $US100m cap raise 
  • Accountants stated the company was worth $US40m 
  • EverEdge audit found a key disruptive tech, still in early concept stage
  • Potential impact of the tech boosted valuation to $US200m 
  • Client eventually raised $US400m equity, $US750m in debt 

Client Information

A company was preparing a $100 million capital raise and asked a Big Four accounting firm to provide it with a valuation.

The Problem

Valuations can be arbitrary and the final amount raised can sometimes come down to the amount of sleep the investors got the night before a pitch. On the other side, valuers sometimes succumb to “tunnel vision” by focusing on forecasted cash flow and rarely assessing the intangible assets that make a company special.

In this case, after looking at the company’s balance sheet, a major accounting firm returned a value of about $US40 million, which made the planned capital raise non-viable.

The company felt its value hadn’t been realised by the accounting firm and engaged EverEdge to perform a deeper dive into the value of its intangible assets and present a more comprehensive valuation of the company beyond the standard financial information that appeared on the balance sheet.

The Solution

After auditing the company’s assets, EverEdge discovered that the client had a constellation of intangible assets generated off the back of a disruptive new technology.

These assets had been left out of earlier valuations because they were almost entirely intangible, which meant their value wasn’t captured within any financial accounts.

EverEdge worked with the company to implement a multi-faceted strategy to protect the assets, along with a narrative that could be shared with potential investors that articulated the new technology’s likely disruptive impact on the market.

Results & Benefits

EverEdge valued the company at $US200 million pre-money (how much a startup is worth before any capital investments).

While the accounting firm did not accept the new valuation, it was accepted by an investment bank in New York which subsequently helped the company raise $US400 million in equity and $US750 million in debt. In 2019, the founders exited for $US3.2 billion.

EverEdge remained at the client’s side throughout the whole journey helping it to ensure the assets were not only protected but also that the company’s value was recognised by potential investors.

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