​M&A activity is on the up in the UK and the US, surging by 59% and 64% respectively in 2024. It’s largely thanks to a stabilising market, increasing risk appetite, and a focus shift toward operational resilience and supply chain security (to name a few).

Familiarising yourself with valuation methods and platforms can help you get a better understanding of the current business landscape, enabling you to make more informed hiring decisions.

For example, highly competitive compensation packages often contain equity offers, so understanding a company’s valuation could help candidates better assess their prospects.

Multiples

Valuation multiples can reveal snapshots of a firm’s financial health, but despite doubling as a handy alternative to conventional metrics, they often fail to paint the whole portrait. In the era of digital disruption (where tech can scale at warp speed), multiples can be misleading.

Herein lies a major challenge in the valuation of high-growth companies in the clutches of a digital transformation – substantial investment into a new, tech-enabled infrastructure may lead to lower initial profits, all while representing greater future potential.  

Platforms like Dealroom account for this prospective growth by drawing on a range of metrics, including stage-specific multiples that can be used to consider the inherent risk in transformation. Check it out here: https://dealroom.co/guides/multiples.

Qualitative Factors

Valuation multiples shouldn’t be the sole factor, not when qualitative factors can have such a potent impact. Brand health, customer loyalty, leadership, competitive positioning, the strength of intellectual property, and tech enablement can all make a difference.

Take negative PR as a prime example – the drop in stock price following a scandal is a clear illustration of how qualitative factors can dramatically impact valuation. Conversely, brands like Nike and Patagonia are ideal case studies.

A Talent Attraction Piece?

With stability and security near the top end of the jobseeker’s priority list, financial transparency is a strong draw. Aside from potential equity packages (which are particularly common in the startup space), a comprehensive and transparent valuation represents long-term viability. Plus, it can cultivate trust among your existing employees, another crucial part of the talent attraction process.

Digital Transformation

A successful digital transformation can unlock immense value for your organisation, provided you’ve gone for the right combination of moves. The process typically adds a few layers of complexity into the mix, often making it difficult to understand its impact.

Companies with a well-developed digital strategy allow for more seamless integration between new tech and existing systems, translating to both operational efficiency and a more sustainable business model.

Behind every great digital transformation project is top talent, a world-class culture, and a dependable, adaptable strategy. We can help you get all three. Contact Trust in SODA to find out more about our recruitment and consultancy services:

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