Business valuation career advice

So I’m about a year and a half into my first ever finance gig, as a valuation analyst for a small firm. Valuing small business, holding companies, working on litigation work with the owner who is often hired as an expert. From my research, I’m being paid on the low side but I’m not pushed too hard (no weekends, rarely after 5:30) and given a lot of freedom to do my job. I dropped a couple cold applications to try to get some comps and get more money.

This last month, my phone has been ringing and my inbox has been getting messages from a couple recruiters and a couple companies, one of which is one of the big four accounting firms, which is of most interest to me. I talked to a recruiter there then they followed up and are setting me up for another phone interview to talk to a partner in the branch.

Is there anything that I should know? I don’t really have many people to ask, as the only few valuation people I know, I work with. Does a switch from a small firm to a very large one have any negatives that I should know about?

I’m fine with working more, but I need to be paid more, per hour of work (which should be easy, as I don’t make very much currently, even after a raise)

Part of me wants to stick around and see how it plays out because the owner is absolutely killing it. If I stay I could learn more, maybe even have my own firm someday. As far as what I want, I was drawn to finance to do equity research/portfolio management, like nearly everyone else, but ultimately, I’m willing to work really hard, play by the rules, and get that check, where ever it is.

I started at an almost identical firm in 2009 at $42 and now I make $80 if that helps. I would say most of that increase is due to doing a good job and being able to make my boss’ job easier (he also testifies). Getting the CFA charter helped too. If you’re happy where you are and the pay isn’t too low you might wait until your annual review and ask for a higher salary if they don’t kick down.

Appreciate the post, it’s very helpful. Got my phone interview lined up so going to hear them out and see what they got to offer.

In a pretty similar situation and have actually taken some interviews. If you don’t like the feel at the bigger shop, you don’t have to take the offer. At the very least, if you are given an offer you can take it to your boss and try to negotiate a more competitive salary.


^ I had a similar experience a few years ago, in the UK too. Took 3 months after applying just to get a callback, I had to quit my new job at a small shop 3 months in, felt like a real dirtbag. Does the big 4 start with a P…?

Seems like their interviews are hit and miss.

Yeah it does! woops I hope I haven’t given anything away :wink: Are you still working there?? If not, what have you gone on to do, if you don’t mind my asking.

Price Waterhouse?

Got any info on them buddy?

Nope. Just replying to the posts above.

No I left after 2 years and now work for ratings agency. Love it here, much better work/life balance, get paid more and work is more interesting (IMO).

On topic: sorry hpracing, I don’t really have much to add here, my experience at pwc would probably be different from how the US firm operates.

Working at a small litigation shop will be night and day different than working at Big 4. Obviously, there are many differences just working for company of such a greater scale (simply corporate culture, think more bureaucracy, but perhaps better benefits for example). At Big 4, you will work 60-70 hour weeks January through April, pretty even keel 40ish hours the remainder of the year.

Without more information, it’s hard to say where you’ll make more $$. Assuming average cost of living (not NYC, but not Podunk, TX), with 1.5 years experience and already clearing Level 2, I’d estimate your total comp should be $65-75k at this point. Some times there is more opportunity to stand out at a smaller shop, so there could be bigger upside. Big 4 will be very structured, annual 3-5% raises, small if any bonus, 10%-ish raises upon promotion plus $5-10k bonus. Director level at Big 4, if this is the track you end up purusing, will put you at $175-$225k after 10-15 years. There are 4-5 steps btw being hired as a junior associate and reaching this upper level.

In terms of the actual work you’ll be doing, valuations done at the Big 4 are most generally for financial reporting issues (purchase price allocations, impairment analysis, granting stock options to executives). This is likely very different than what you’ve been exposed to in a litigation setting. Many of the models are still reliant upon traditional valuation methods such as DCF, market comps, etc., but the purpose of the valuation work will be different. And purchase price allocations are totally unique. Also, a large percentage of the work at Big 4 is audit reviews, which is where you are reviewing and commenting on other valuation firm’s reports. Some people like this kind of work, others hate it. It is tedious, like accounting, not suprising for a Big 4 firm.

^ That is very helpful, thanks! I had a phone interview, actually a conference call, today with the director and a few team member today. Nice guys. What they described they do is exact what you said. Purchase price allocation/goodwill impairment. I hope it went well. I’m in Texas so they said oil and gas knowledge would be helpful, which I have some working on litigation, partnerships, and valuing private oilfield service co’s.

This is off topic a bit - but have you guys checked out the Duff & Phelps 2014 Valuation Handbook? It combines the old SBBI and D&P report into one publication. I read through it yesterday - pretty cool stuff in there (I know, I’m a nerd).

I read it the other day, I thought the section about the WWII bias was very interesting. They did a good job on the book.

The one issue I have, which has been a big debate here is the application of a control premium while using an ERP derived from market data. The book says there is no debate and that the initial value is not minority value. I disagree with the book and the courts and my coworker!

The real argument is as follows: Are publically traded company worth more if you have control? The answer is no. Sure, in a merger, the acquired company’s price per share goes up. But if all minority shares were intriniscally worth more if you had control, every publically traded company in existance would instantly be bought. The fact that this hasn’t happened is proof that publically traded shares are not priced on a non-controlling basis (i.e., they are already on a conrolling level). There’s an article by Eric Nash that explains this better than I have - he’s kind of the guru on this issue.

When I got to work this morning I called D&P because I had a couple of questions. They transferred me to the author, Jim Harrington, who talked to me for about a 1/2 hour! Take away points from our conversation were as follows:

–The SBBI IRP data is levered. There is no way to unlever and re-lever this data.

–Industry betas do not revert to one over time (i.e., towards the market).

–The D&P exhibits C and D can be compared to A and B for the purpose of quatifying company specific risk.

My experience in valuation theory is that public company stock prices are priced on a non-controlling basis. I don’t know how you can argue otherwise.

Any interest from or for corporate development? I’m in this space at a big PE backed company and really dig it. I’m valuing businesses to assume to grow our product and service line.

^ It’s good work and I’ve done a bit in a company. But also the first department to get booted in tough times or after getting acquired. Companies that aren’t growing don’t need corp development.

I’d be very interested to talk to someone that has made the jump from BVal to corp dev. I’ve given this move a lot of thought in the past as it seems to be a natural fit and also much more interesting.

There tends to be a bit of stigma against BVal despite there being many overlapping skill sets. Typically, there needs to be a step in between BVal and a role where you are closer to transactions (I’m also thinking IB/PE/VC when I say that), and that step is traditionally MBA. A fresh grad from a decent school, even just an undergrad, will generally be preferred to a BVal professional with <5 yrs exp in these industries.