Venstrat provides strategic advisory services to help enterprises maximize shareholder value in anticipation of eventual monetization of equity interests. Virtually every successful company will, at one time or another, convert equity into cash, interest in another entity, or other form of consideration. The process may occur through an initial public offering, sale to another company, acquisition of another company for stock, or entry into a joint venture. It is imperative for the owner-manager, therefore, to prepare well in advance for a monetization of equity interests through the development and implementation of a long-term strategy for creating value.
Bringing It All Back to the Ultimate Objective: Value Creation
The owner-manager is fully cognizant, of course, that value creation is the ultimate objective. Rarely, however, is expected progress toward that goal examined quantitatively, using metrics observed in the public markets. Rarely are various strategies under consideration compared explicitly in terms of value creation potential. All too often, the magnitude of cash flow is the only criterion used in determining the merit of the particular strategy in question. But such an approach does not directly address the ultimate goal of value creation! A dollar in net cash flow generated in three years by Initiative A is not worth the same today as a dollar generated by Initiative B. Why? Because each initiative carries a unique risk profile, as dictated by the market, the ultimate judge to which every owner-manager is accountable, whether directly or indirectly.
Venstrat helps businesses ensure that the strategic planning process revolves around the core long-term goal: building value for shareholders. We analyze and evaluate each major initiative under consideration – acquisitions, joint ventures, new product launches, expansion into new geographic areas – using a rigorous, market-oriented process.