Welcome to The Value Add - our new podcast series where Houlihan Capital's experts tackle the questions that matter most to our clients and referral partners.
Episode 1: Liquidation Preferences & Valuation Methodologies
“Many VC funds operate with limited information rights—and auditors are asking for stronger support. That’s where we come in.” —Monica Blocker
In our premiere episode, Monica Blocker, Director of Business Development, and Joe Brennan, Director of Valuation, explore one of the most pivotal choices in private company valuation: when to use the Option Pricing Model (OPM) versus the Common Stock Equivalent (CSE) approach.
What You'll Learn:
- Why timing uncertainty almost always favors OPM
- How to work within limited information rights constraints
- What auditors really expect from your valuation methodology
- The collaborative approach that makes audit season manageable
Key Insight: "The choice would be the OPM for sure... not applying [liquidation preferences] to each share class is a little bit too much of a shortcut." —Joe Brennan
Perfect for: Fund managers preparing for audit season, dealing with complex capital structures, or looking to strengthen their valuation processes.
Episode Length: 9 minutes
Questions about your fund's valuation approach? Our team provides hands-on, collaborative support to help you navigate complex methodologies and audit requirements.
For questions or inquiries please contact:
Joe Brennan
Director
jbrennan@houlihancapital.com
Joe Brennan is a Director in Houlihan Capital's Valuation and Financial Advisory practice, where he helps perform valuation work that covers financial reporting, tax, strategic planning, and fairness opinions. Mr. Brennan’s primary focus is on assisting the firm’s cryptoasset clients, working closely with fund managers and investment advisers to identify, analyze, and solve unique valuation challenges.
Prior to joining Houlihan Capital, Mr. Brennan spent over three years at Cohen & Company, where he specialized in illiquid cryptoasset valuation and consulting work for several high-profile hedge fund, venture capital fund, and private equity fund clients that needed assistance while navigating this nascent asset class. Prior to Cohen, Mr. Brennan issued fairness opinions for both buy-side and sell-side transactions and annual valuation updates of ESOP-owned companies with annual EBITDA between $500,000 and $120.0 million.
Mr. Brennan earned his Bachelor of Science in Accounting and Finance at Marquette University and is a Certified Public Accountant.
