What's It Worth Valuations with Bharat Kanodia
Bharat is the founder of Veristrat. He has been in business valuation since 2000 and has valued assets in real estate, industrial, personal property, and financial assets including some unique assets i.e., the Golden Gate Bridge, NYC subway system, Hartsfield Atlanta Airport, and Las Vegas casinos.
Bharat has formerly worked with American Appraisal and Silicon Valley Bank Analytics. As an appraiser, Bharat has signed off on over 4000 valuation opinions with $800 billion in assets. Bharat holds an undergraduate degree in mechanical engineering from the University of Wisconsin and an MBA from Marquette University. He is a senior accredited member with ASA.
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Brett:
Please welcome to the show with me he is the founder of Veristrat, he has been in the business valuation since 2000 has valued assets in real estate, industrial personal property, and financial assets, including some unique assets in the Golden Gate Bridge, New York City subway system Hartsfield Atlanta airport and Las Vegas casinos. Please welcome. I make sure I pronounce this correctly. Bharat Kanodia. Can you pronounce that correctly, for me?
Bharat:
Kanodia, Brett. Thank you for having me. What you've got your spiel down? You've done this before?
Brett:
We keep learning from some of the best in the podcast world and we just try to improve every single day. But in to start the show. I always like to give our listeners a little bit about your story and your focus. Would you share a little bit about your story and your current focus?
Bharat:
Sure, I currently help, most of my clients are either startups or venture capital firms that need valuations. As you can imagine, startups are raising capital every three to six months, so they need a valuation, and correspondingly, the venture capital firms are always raising capital and investing capital. They need valuation almost on a weekly basis. Those are my ideal clients right now, and I've been in this world in this business for 21 years and it's been a great ride.
Brett:
By the way, you can learn more about Bharat Kanodia at Verisrat.com that's very Chateauneuf spelled out for everybody, VERISTRAT.com, and we're talking all about what is it worth? What's your business worth? What's the maybe even the real estate property worth? You've been able to do over 4000 valuations with your team values of over $800 billion, and so if there's a leader in the industry, that's done more than that. I don't know if I know them. This is going to be a really exciting show for listeners. Let's just start with I think probably one of the most challenging things in today's times is valuating assets in such a highly appreciated marketplace, especially where some people are playing multiple X multipliers for especially M&A, mergers, and acquisition deals, and trying to get this pro forma. Can you make sense of where we're at as a whole on the macro for valuations? Then also how you're looking at it to make sure that both sides feel like they're getting a fair and equitable deal.
Bharat:
That's a great question Brett, and the way I explained valuations or finance to people is everything has a cost, and money too, has a cost. If the cost of money is low, the valuations are high, when the cost of money is high, valuations are low. Right now, the cost of money, which is really the prime or the interest rate is very low, and because of that valuations are very high, similar to the housing market. Valuations are always a moving target if you will, and I'm not someone who will pontificate upon if the valuations are correct or incorrect. I can't comment if the public markets are valuing things correctly, or incorrectly graded for somebody who's writing a check. Well, that's the valuation. But they are frothy currently because the cost of money is low.
Brett:
I would agree, and that's really fascinating. The way you put that, yeah, the cost of money is low when the cost of money is low. Like now interest rates are very low all-time lows, record lows for a very long period of time now, valuations tend to be high, and then when the cost of money is high, valuations tend to be low. Because you can't leverage Purchase as much because I don't have much purchasing power, and so when you're seeing these, these opportunities to evaluate, and you're looking at it from it looks like you're doing the appraisals, but also you're also doing the mergers and acquisitions. But you give a little bit about your service and what you provide, and then how what you're even if your take on the marketplace, where do you think we're at in this in this market cycle.
Bharat:
I help in M&A, so I help buyers make sure that they are getting what they are paying for, and sellers ensure they are also getting what their assets are worth. For example, I am helping a small chain of grocery stores and North Carolina and South Carolina, they have about 18 stores, and the buyer and seller. They want to consummate a deal, but they can't decide what the right purchase price is. They brought me in to be the tiebreaker. I am helping a startup currently exit and they have raised about $26 million, and they are looking to exit about 300 million. They're getting acquired by a PE firm and the PE firm brought me into a sort of just checking them out and making sure that 300 million is reasonable. I help buyers and sellers on the M&A side. Think of me as a vet, if you will. A dog, a horse, a frog. It's all the same. I am industry agnostic, I am size agnostic. But I focus on my magic eight ball, which is valuations.
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