Re: Adv Merger model error
Correct observation!
However, in the 6th and last video of the Super-Advanced M&A course, at 6:27, we go back and fix the error by re-anchoring. If you want to match the (wrong) numbers throughout the video, leave it as incorrect zeroes until you reach that point in the video.

Re: Adv Merger Model - debt sweep
The proper way is to have it in order of priority of liquidation. So: ALL Senior Notes (primarily bank debt) (NEW and OLD, TAR and ACQ) ALL Corporate Bonds All Subordinated etc Our assumption was that all existing debt is corporate bonds and since we definitely raised new Senior Notes, we put Senio... The proper way is to have it in order of priority of liquidation.
So:
ALL Senior Notes (primarily bank debt) (NEW and OLD, TAR and ACQ)
ALL Corporate Bonds
All Subordinated
etc

Our assumption was that all existing debt is corporate bonds and since we definitely raised new Senior Notes, we put Senior Tranches on top.
Revolver in theory goes on top as well since it's the most senior, but our modeling best practices is to put Revolver at the bottom since generally, for a gonig concern, you shouldn't need to draw upon your revolver. Since our Complex LBO and Super-Advanced M&A models require revolver to be paid down before any other pre-payments, one could move the new revolver to the very top. Note, that we treated existing revolvers as Corporate Bonds since most likely they would be refinanced anyway, and certainly, the old revolver facility shut down. Read More

Re: Toggle Reference File Links
Hi, Thank you for your inquiry. Yes, this is doable fairly easily, combining a bunch of various tools in excel. While we generally discourage linking between files, we can understand why you want to in this case. Here’s how we’d go about it. Assume you’re working in a new file, called “Ro... Hi,

Thank you for your inquiry.
Yes, this is doable fairly easily, combining a bunch of various tools in excel. While we generally discourage linking between files, we can understand why you want to in this case.

Here’s how we’d go about it.

Assume you’re working in a new file, called “Roll-Up” and a tab called “Summary” that will pull all this information in. We also assume you’re pulling the same cell reference from each file/tab (else this doesn’t make sense to automate).

Set up your Summary as follows:

In cell A1, put in the FILE NAME as hard coded text:
Product Line by Division 10.13
In cell B1, put in the TAB NAME as hard coded text:
NE Watsontown
In cell C1, put in the CELL ADDRESS as hard coded text:
B4 (random cell, but update with your reference you want to pull in)

Now, if you did a “normal link”, here’s how the formula in say D1 of Summary would look:
=’[Product Line by Division 10.13.xlsx]NE Watsontown’!B4

So you need to concatenate to get that result and wrap an INDIRECT function around it to work. You can look up what INDIRECT does in Excel help. In D1, your answer is:
=INDIRECT("'["&A1&"]"&B1&"'!"&C1)
And viola!

Please note that in order for this to work, all the files must be in the same folder (if new file, it must be saved first). If the files are in different folders, just use the same logic and pre-pend the path/directory in front. Idea is to replicate the formula if you were to have manually linked it, except you are concatenating from different cells. Read More

Re: Convertible Debt Adjustment
1) You would adjust the S/Out by the amount that still has not been converted. We don't remember the numbers off-hand, but it would not be the entire maximum amount of shares. 2) Yes, same for all convertible securities. There's no difference in this context between preferred or debt. The differen... 1) You would adjust the S/Out by the amount that still has not been converted. We don't remember the numbers off-hand, but it would not be the entire maximum amount of shares.

2) Yes, same for all convertible securities. There's no difference in this context between preferred or debt. The difference is in the convenants, but not from a valuation perspective (for non-distressed companies).

3) The general rule is to use whatever latest available information is around. Thus, using the 10K capital leases would be ok ASSUMING the numbers aren't that materially off. Chances are, the change isn't material and so, as a proxy, you would have no choice. We do discourage it, but absent any info, we have no other option.

4) Back to your #1. 9.4MM is the REMAINING amount. Read carefully. It's possible that Hamilton made a mistake, but unlikely!
Note that we're paid to say that!

5) The zero-coupon adds an extra layer of complexity because the current value on the books is what needs to be compared, not the full principal amount due at maturity. Please re-visit Hamilton's explanation in the videos on this point. (or ask a specific question that we can answer, thanks!)

6) Generally, the way converts work, you elect to take shares INSTEAD of receiving principal amount in the convertibility period. So, no, you do not have to buy the underlying stock. That is the case with options and warrants, but not converts.

7) You would have to re-do your analysis with each new reporting period. the stock price would have also changed at that point as well as the new carrying value on the books.

no problem with the volume of questions - that's what we're here for!
And apologies for the delay in responding - your account was locked and we didn't see the question coming in. Read More

Re: startups
Valuing startup companies is like throwing darts at the sun. None of the usual valuation methodologies apply because no one knows what will happen and the high risk and probability of failure despite the huge potential reward. Even multiples is sort of silly since who do you pick as your benchmark?... Valuing startup companies is like throwing darts at the sun.

None of the usual valuation methodologies apply because no one knows what will happen and the high risk and probability of failure despite the huge potential reward. Even multiples is sort of silly since who do you pick as your benchmark? Investing in startups and vc is an investment in the mgmt not necessarily the company or product (though important of course).

Sounds like you are advising the company looking to raise $$ I would approach it by modeling out a couple different scenarios to see where the potential revenue/profit/cash flow generation is - at least three cases: your typical downside, expected and upside case. In terms of $ raised, I would base it on capex requirements and marketingn etc + one year of run-rate expenses (more if mgmt is conservative). Then using your expected/realistic case, model out %age to investor such that IRR is 30% to 40% and then you go from there and negotiate. Read More