Through a buyer’s analyst’s eyes
The same business, read the way a buyer’s analyst reads it. Knowing the adjustments that are coming lets you document each one in time and keep the value you’ve built.
Why read your business from the other chair
Every buyer sends an analyst through your numbers before quoting a price. The analyst makes a short, predictable list of adjustments. If you know the list now, you can document each item while there’s time, and the value you’ve built stays credited.
Two columns, one P&L
Both columns start from the same reported profit and the same documented adjustments. The analyst then makes two more: R&D raised to what platform owners normally spend, and the owner-pay add-back held back until the market salary is evidenced. Both columns are valued on the same engine.
- SCredited$530k
- 1R&D to band floor−$119k
- 2Owner pay unevidenced−$60k
- EAnalyst’s view$351k
How to read it. The first bar is the profit the report credits. Each red step is one adjustment a buyer’s analyst makes. The last bar is the profit the analyst argues from.
| Line | Your view | A buyer’s analyst |
|---|---|---|
| Reported EBITDA | $448,150 | $448,150 |
| + Owner pay above market | $60,000 | $60,000 |
| + One-time items | $22,000 | $22,000 |
| = Normalized EBITDA | $530,150 | $530,150 |
| − R&D raised to the platform-owner band floor (8% of revenue) | — | −$119,250 |
| − Owner-pay add-back held back until the market rate is evidenced | — | −$60,000 |
| EBITDA each side argues from | $530,150 | $350,900 |
| Value on that basis (engine re-run) | $3.93M | $2.66M |
On the analyst’s profit the engine values the business at $2.66M against $3.93M as concluded. Both numbers are on the page so neither side has to take the other’s word.
The register: each item and what settles it
Tap an item to see the document or action that takes it off the table. Most are paperwork the business already half has.
Each finding names where its evidence sits in the report, why a buyer cares, the effect of an engine re-run if it went the buyer’s way, and the document that settles it. Effects are single re-runs from the concluded value, so they overlap and never add up.
R&D at 3.5% of revenue, against an 8–16% band for platform owners
What settles it. A platform roadmap with three years of releases, the engineering headcount plan and the open-source compliance file.
Effect if it went the buyer’s way: −$846k on the buyer’s rule; −$502k on the engine’s own rule.
A second layer of four runs the business; three sets of agreements are missing and the platform knowledge sits with one person
What settles it. An organization chart with tenure, employment and non-solicit agreements for the second layer, and a retention plan tied to the objectives.
Effect if it went the buyer’s way: −$622k on the buyer’s rule; −$485k on the engine’s own rule.
Owner pay $60k above the market rate for the general manager who replaces the owner; the market rate is stated, not yet benchmarked
What settles it. A third-party compensation benchmark for the role, and a named successor or a hiring plan with a start date.
Effect if it went the buyer’s way: −$426k on the buyer’s rule; −$253k on the engine’s own rule.
$212k of deferred revenue: cash collected for service not yet delivered
What settles it. Agree the working-capital peg definition and measurement date before the letter of intent.
Effect if it went the buyer’s way: −$212k on the buyer’s rule; — on the engine’s own rule.
25% of lost customers left with no recorded reason
What settles it. A reason code on every disconnect from the next billing cycle; twelve months of coded churn before market.
Effect if it went the buyer’s way: −$184k on the buyer’s rule; −$144k on the engine’s own rule.
One carrier carries 50% of traffic
What settles it. A second carrier above 25% of traffic with tested failover; the carrier contracts in the data room.
Effect if it went the buyer’s way: +$180k if fixed on the buyer’s rule; +$140k if fixed on the engine’s own rule.
The forecast’s seat growth rises from 8.1% to 9.3% a year
What settles it. Twelve months of coded churn and a seat roll-forward that reconciles to billing.
Effect if it went the buyer’s way: −$157k on the buyer’s rule; same on the engine’s own rule.
32% of customers are out of term (28% of recurring revenue)
What settles it. Move out-of-term accounts to annual terms with an escalator; a contract roster by expiry date.
Effect if it went the buyer’s way: — on the buyer’s rule; — on the engine’s own rule.
- Two persistence rules. Effects are shown on the buyer’s rule, where a normalization is permanent, and on the engine’s own rule beside it, so one event never carries two unlabeled values
- Severity. Red can stop or re-price a deal; amber will be priced or escrowed; noted will be asked about
- The market lens. On the analyst’s EBITDA the value is 7.6×; the size-adjusted precedent lens on the same EBITDA gives 4.2×–6.8×, so the lens is the floor of the argument and the cash-flow view its ceiling
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