Capital Planning in Healthcare: valuation overview

For industry leaders and entrepreneurs charting the course of their company’s future, understanding the financial aspects of business valuations and fundraising is a strategic asset. 

In this article written by Stephen Brock, CEO of Medical Funding Professionals you’ll gain rich insights on these and other important topics in this area, including an overview on valuation for biotech, medtech, pharma, and life science companies. 

Keep reading and learn more.

First insights: the valuation process

So, to begin our journey, let’s talk about finance, which is a key point that impacts the pathway of any company. 

We all know that this is a broad subject, but one of the main issues is the valuation process. 

A practical example: if you own a company with $25 million in revenue or less, a business valuation can cost you anywhere from $0 (provided by a broker for free) to $40,000* (estimates based on current values at the beginning of 2024). 

There are two main types of valuations you will encounter: 

 

      1. Legal valuations: Legal valuations require the valuation expert to meet specific requirements since it will be used to support legal cases. The person performing the valuation must be certified and the methods they use must follow certain legal standards.
      2. Fair market valuations: When valuing your company a number of data points are built with a few of them being How much your assets are worth The present value of your future cash flows How much common stock is worth at similar (comparable) companies How much equity your company has in other similar businesses or industries, pre and post-money valuations, what does exit value look like, what does a share price project out to be, what comps for M&A and IPO in similar space you work in has occurred, what VC valuations have been printed

 

Attention! Depending on the type of valuation you need and the specifics of your business, the price will fall somewhere in that range.

 

The importance of capital planning

If you’re setting up a company or leading one in areas like BioTech, MedTech, Life sciences or Pharma, it’s important to keep many issues in mind. Especially when you’re aiming to raise money from investors, working strategically is essential.

Among the key points in this context, are creating the company’s structure in a strategic way that can stand out in the market, increasing the potential for attracting investors.

When raising capital in the private markets, seeking professional advice is crucial, working with trustworthy partners the process can be compliant and less stressful.

Solutions for healthcare industry

If you are looking to fundraise without giving up control of your biotech, medtech, pharma, or life science company, you’ll need to find a path to guide your business journey. Medical Funding Professionals developed the Capital Planning Valuation Strategy™ (CPVS™). The method is a custom-prepared funding roadmap and go-to-market strategy, designed to be efficient and straightforward.

One of the main purposes of CPVS is to guide entrepreneurs through each step of the fundraising journey, all with transparency and tailored plans.

Furthermore, the Capital Planning Valuation Strategy™ is designed to meet the unique needs of business owners who prioritize streamlined compliance and sustained leadership in their companies. By offering an alternative to the normative procedures of fundraising, it facilitates a more efficient path to capital acquisition.

Want to know more about the CPVS™ program? You can access the link and get more information directly from Medical Funding Professional’s specialists