Overview
Introduction
About Value Sweep
Frequently Asked Questions

About the Book
Excerpts from the Book
Endorsements
Downloadable Spreadsheets
Recent Press
Recent Articles
Errata

The Author
About the Author
Contact the Author
Interview with the Author

Additional Resources
Real Options
Decision Analysis
Other Valuation Links
Venture Capital and Startups
Intellectual Property

Why did you write Value Sweep?

During the past few years, I felt the clash of four worlds:

• I learned the elegant, practical and powerful ideas of modern finance in graduate school. But the ideas were not used in most corporations.

• My consulting clients wanted to see and manage uncertainty, but my help was no help - it was too mathematical, too hard and didn't work with capital budgeting processes.

• Entrepreneurs and venture capitalists seem to know how to talk about and manage the risk of growth but why couldn't those outside of that world?

• Managers don't like the hard work of current valuation tools. They genuinely want to better for their employer, and are frustrated.

The managers I've met gave shape to the vision of this book: a method to create easy-to-use and credible valuation tools that can be used to compare growth opportunities across the sweep of value.

What is the Big Idea in the book?

There's usually one idea that makes the author get up in the early morning to write a book. For me, this has been the notion that the value of private assets can be transparently linked to market values. This connection opens the door to growth itself: A strong link aligns strategy and value; A transparent link spurs outside financing to growth opportunities; A rational yet easy-to-use-framework speeds the negotiations for private assets. Most important, transparent alignment with market values makes comparisons across growth opportunities clear.

Who is the book written for?

This book is written for the managers who don't want to be valuation experts; the strategists who want to weigh alternatives with a set of simple calculations; the CFOs and business unit heads who want to compare the varied initiatives clamoring for their approval; and M.B.A. students who are trying to grasp and use high-powered ideas. Real people require credible, transparent, and easy-to-use valuation methods that work across the sweep of growth opportunities.

We've all seen new valuation methods before and they are hard. Dense and mathematical. Is Value Sweep more of the same?

No. The structure of value in growth projects is often opaque to senior management. Doing fifty different spreadsheet runs based on DCF will only further annoy top executives. Unless there's a change, the finance staff is in great danger of being shut out of the strategic decision process. Imagine that the finance types arrived at the critical meeting with a simple and compelling story of value growth, benchmarked against other opportunities, and aligned with financial market valuations. Guess what? They did it on the back of an envelope, using established valuation templates. Who is the hero now?

What's the goal of the book?

An improved valuation model, a better number, is not the goal. The success payoff to new tools for valuing growth opportunities is to change decisions, to increase choices, and to smooth the way for faster and more valuable growth. The valuation results from improved tools are simply the means to the end.

Right now, we can't have a rational argument about the value of growth opportunities because we don't have the shared images, the common language, or the same set of valuation tools. Valuation arguments are won by the party that holds a key asset -- money, an audit credential, or an important contract - not by a rational argument.

A new approach to valuation, which results in a better number, results in a faster and less risky path to growth. That's the point of Value Sweep.

How have you used these ideas?

(Laughter.) I started writing this book because I thought there could be a better conversation as a strategy and valuation consultant. It was an act of synthesis from my years on the frontlines. But, I also switched jobs. Right now I'm the CEO of a software startup. I find myself using the ideas almost everyday as I think about our company's risk - what I need to accept and what I can work to reduce. I think about the leadership of growth. I use my own valuation templates to know when I can negotiate out of a valuation and when I should look for other terms that are meaningful to our young company. I laugh because in the environment of falling valuations, I literally wrote the book on why we're being faced with the bad news!

What's next for you?

Books are a wonderful two-stage learning opportunity. First, you organize your own thoughts, finally learning the material. Then, when the book comes out, you have wonderfully rich conversations about those ideas. I'm looking forward to what I'll see and learn in the second stage.

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