Understanding your business valuation is essential for making strategic decisions, whether you’re looking to buy, sell, or grow. Have you ever wondered, “How do I know what my business is really worth?”
In this episode of the #Career101Podcast, host Porschia and guest Michael Blake, founder of High Score Strategies, discuss the importance of business valuation and its role in achieving better business outcomes.
They dive into how valuation can empower entrepreneurs and executives with the knowledge they need to make informed decisions. Michael shares practical insights on the methods used to assess a business’s value, common mistakes leaders make when approaching valuation, and why timing is critical.
Mike Blake is the founder of High Score Strategies, a business valuation firm that helps clients navigate strategic challenges by understanding the value of their assets. A former venture capitalist and investment banker, Mike is passionate about empowering organizations to make smarter decisions that drive lasting impact.
What you’ll learn:
- What business valuation entails and why it’s critical for strategic decision-making.
- Common scenarios where business valuation is essential, from selling a business to raising capital.
- How to navigate challenges in estimating the value of your business and why timing matters.
- Key methodologies used in business valuation and how data drives accurate assessments.
- Practical tips for leveraging business valuation to enhance strategic planning and growth.
- Insights on monetizing intellectual property and creating additional value from hidden assets.
As a thank you for listening to this episode of the Career 101 Podcast, we are sharing our FREE master class – Career 911: Solving the Top 5 Challenges Executives and Professionals Have! It’s a training based on solving the common problems our clients have experienced to reach their goals. You can get access to the master class here!
Resources:
- Episode Transcript
Porschia: [00:00:00] Today we are talking about business valuation with Mike Blake. Mike Blake is founder of High Score Strategies, a business and intangible asset valuation firm that helps its clients achieve winning outcomes from their strategic challenges and opportunities. A recovering venture capitalist and investment banker, Mike accomplishes this by empowering his clients with knowledge of the value of the assets they’re acquiring, selling, licensing, or [00:01:00] operating, which makes them superior decision makers.
Mike’s passion is helping people and organizations become better decision makers. In his non professional time, Mike is a semi professional rock musician, chess player, retro video game and computer enthusiast, especially Atari consoles and computers from the 70s and 80s. Hi Mike, how are you today?
Mike: I am fantastic for thanks so much for having me on today.
Porschia: Thank you for being here. I am really excited to have you with us to discuss business valuation. But first we want to know a little more about you. So tell me about seven year old Mike.
Mike: So some would say seven year old Mike and 53 year old Mike aren’t all that different, at least emotionally and intellectually speaking, but.
seven year old Mike grew up in a town called Boxford, Massachusetts, which is about 25 miles north of [00:02:00] Boston. At the time, the town was so small, it didn’t have a traffic light. You could make a local call by dialing five digits and was one of those places where you didn’t even, you didn’t even lock your door.
There was no need to do that. So I grew up in a in a fantastic environment. I played sports. I loved science. I loved even back then computers and technology, even though I didn’t know that much about them because I was seven. But what I did know I loved and I wish I could give you this dramatic, tragic backstory as a kid, but it’s about as boring as you could possibly imagine.
Porschia: It doesn’t sound boring. It sounds like you might have been on the Atari or something like that. So that sounds interesting to me. So what did you want to be when you grew up?
Mike: When I was that age, I wanted to be a meteorologist. I was fascinated by the weather. And one of the things I really loved and still love today is [00:03:00] maps, right?
So the meteorologist would come on and you get to see these really cool maps and this is before you had Doppler radar they’re really just maps, like little drawings of the fronts and stuff. And yes, satellite photos. And those were really the new thing back then. And it was so fascinating.
So that got me interested in the. In weather and the fact you got to interact with maps. And that’s what I wanted to do.
Porschia: Very cool. I agree. I always thought watching the weather forecast and the maps and listening to the meteorologist, I thought that was super interesting too, as a kid. I think it’s still interesting now.
Maybe that just means we’re both nerds. Like maybe
Mike: that’s okay. The nerds are taking over, but one of the neat things, I live in Portugal now. It’s so interesting now to look at weather maps that are different through of Europe instead of the Southeastern United States. I’m like, oh, I live here.
This is relevant to me. So again, a [00:04:00] different way to geek out on weather maps.
Porschia: I got it. And a whole new climate to further geek out on Mike. Tell us about some highlights or pivotal moments in your career before you started your own business.
Mike: So my first job out of school was I was hired to run a USAID privatization and economic transformation program.
In Minsk Belarus, and I was 23. I was a student at Northeastern University, had a full scholarship fellowship, and I was offered that job almost didn’t take it. But then a friend of mine reminded me that, in the years prior, I’ve been studying Russian since high school. Was always pretty good with languages.
And I, at the, at that time, of course, follow the Berlin wall. We thought that our relationship with Russia was going to be very different than what it’s turned out to be, unfortunately, but at the time, a lot of hope and my [00:05:00] friend reminded me that was the job that I’d spent my entire life or my entire semi adult life preparing for, so I dropped out of school and took that job and basically was given a plane ticket.
And a phone number of a guy to call once I reached Minsk would be my partner when I was there. And I was the only American on the ground. I’m still stunned. I’m still stunned. They hired me. My Russian wasn’t all that good. Fortunately, I had some lead time. But we took that job and I will say we took about over four years, we spent about 400, 000 of USAID money and we attracted about 300, I’m sorry, 30 million.
Of private investment into Belarus and Ukraine. We actually got a pretty decent return on the investment for the American people.
Porschia: Wow. Wow. That sounds really thrilling. And I would imagine for that being your first real job out of [00:06:00] college, you’ve got the international I guess aspect to the position.
You’ve got the whole political relations going on to your point and then just, commerce going on. So there’s so much to that experience. And it sounds like that kind of set you up for, other opportunities in your career.
Mike: Yeah, I grew up a lot. I grew up, frankly, from a fairly privileged background.
My parents did very well financially. And again, boring childhood. I wanted for nothing. And so when I landed in Minsk, none of that meant a darn thing, right? When I showed up, they gave me this piece of paper. And I had to look up what it was in the dictionary. It was a rationing card. They were still having food shortages.
So as a new resident and I was not living in a hotel at thankful, I was living in an apartment, but I had to find my own food and there was a state limit to how much meat and how much flour and how much sugar I could buy. [00:07:00] No limit on vodka, by the way. I wonder why that was. But anyway there are limits to what I could buy.
And. Ever since then, that taught me how to view crisis in a different way. And ever since, I’ve had been fortunate to, to work with and lead and train some brilliant young professionals. And when something goes off the rails, as it inevitably does in business, despite your best efforts, and you get people that want to panic, I just say, come back to me when the government says you’re limited in how much food you can buy.
And then we’ll talk about a crisis. And that’s always been a great grounding point for me. And yeah, I learned so much in that experience. You talk about the international piece it learned, it taught me empathy, force fed me empathy in a big way, because here was a country that had been our cold war enemy.
They lost the cold war. They knew darn they lost the cold war. And but that. If there are two ways you can treat victory, right? You can do a victory lap and you can spike the football, right? [00:08:00] And that makes the crowd feel good, or you can extend a hand of sportsmanship to your adversary. And tell them good game and embrace them to be better.
And fortunately, probably by dumb luck, I don’t think I had any exceptional wisdom. I chose that that approach and it was rammed home by the fact that the building in which I worked turned out that it was a bomb shelter. And so if you go into the staircase as often, I had to, cause the elevator wouldn’t, was often on the fritz.
There were instructions on what to do in the case of a nuclear attack. And go down into the bomb shelter and put on your gas mask, your fallout equipment and so forth. And I realize, this is telling them what to do in case we launch a nuclear attack. against them. And I’ll always remember that I can still picture that those images as clearly as I am looking at [00:09:00] you across the camera today.
I’ll never forget that. And that was an ongoing lesson to me about thinking about how the other person thinks, feels, and reacts to what’s going on. Reacts and that’s served me very well in my career.
Porschia: Yeah, I’m sure and thank you for sharing that because I think it all touches on what you’re mentioning earlier about empathy.
I actually was in Europe around that time too. We moved to Germany in 1989 right after the Berlin Wall came down and I was Very young at that point, but I do still remember just being an American in Europe at that time. So Mike, what motivated you to start your business?
Mike: What motivated me to start my business is I’ve discovered over the years that I’m not a very good employee.
It’s very possible. I might be even a worse business partner. I’m not sure. Maybe it’s a [00:10:00] tie, but I have learned that I don’t think in conventional business terms. And by the way, I don’t say that with an iota of superiority there are businesses that are more successful. Most of them are more successful than mine, but they wouldn’t be successful for me.
I’m always thinking about the longterm, maybe to a fall. I’m always tinkering. I’m always experimenting. I see business as much as anything as. As a platform to do social good as it is to deliver value to a client. And those two things for me have to align or I quickly lose motivation.
I see a business as a blank canvas. It’s a creative outlet for me. And how can I improve upon what I do? How can I push my profession to improve what it does? How can I raise the standing of our profession within the general public? And [00:11:00] many times that drives people crazy. I’ll share with you this.
I, I still have a performance review I received from not long ago. It was at a firm where I was up for partner, didn’t make it, never was going to make it. But my last performance review before I left said Mike is a team player, probably too much of one and to his personal detriment. And I realize this cannot possibly be for me.
I need to have an environment where the team is first, and I fully admit, I may be the naive one. I’m the naive one that doesn’t do the politics and doesn’t do the, doesn’t do the ring kissing and everything else. I just do what I I think is right and what brings me joy as hedonistic as that sounds.
And for good or ill, in most of the corporate world, what I want is incompatible with. What a lot of employers see as valuable [00:12:00] and even tolerable and that’s okay. So starting my own business gives me the platform to do that when I do things differently, nobody’s hurt other than myself. And it, it takes a big, it, for me, it’s actually less risky and it’s less Stressful than being an employee.
Porschia: Thank you for sharing that. I think that a lot of people have, thoughts about entrepreneurship pursuing it or not pursuing it, what it means to do that. And they think that all entrepreneurs have to be a certain way. And that isn’t true, right? When you go out and businesses, and I’m sure with the consulting you do, businesses and business owners who operate in a lot of different ways.
To your point about being a team player I think it is. Great that you touched on that. We actually have an episode. I think it was episode five back on [00:13:00] teamwork, and we really dove into what does it mean to be a team player and touched on that. So we got into a little bit of what you were talking about there.
So Mike, why did you decide to focus on business valuation as part of your expertise in your own business?
Mike: So this is gonna sound glib, but it’s not intended to be. It’s just the way things work out. God has a sense of humor. I knew I wanted to be in finance. And I started off in venture capital, loved it.
And in particular work for a venture capital fund that focused on taking military technologies and converting them to civilian applications. So I work for a venture fund that actually took facilities that were developing biological chemical nuclear weapons or their delivery system design systems in Russia and converting them to a civilian purpose.
For example, we took an anthrax production facility and turn it into an AIDS [00:14:00] testing kit. Company for the Russian market as an example. I liked it, but I wasn’t very good at it, and I wasn’t very good at it because, at that age in my mid twenties, I just wanted to say yes to everybody and saying yes to everybody in venture capital makes you popular and poor, not necessarily in that order.
And very quickly. And then moved into investment banking, which I was also good at because I’m good at crunching numbers. I work hard enough. I learned enough in VC to understand deal making. The problem is I didn’t like it. It was, and this is nothing against investment bankers, by the way, investment bankers serve a vital critical function in our economy.
And people who think that investment bankers don’t earn the money that they make ought to try being an investment banker for six months and come back to me and see, do you think they don’t earn it? But I don’t do well in an environment where I get paid only [00:15:00] if the client achieves one outcome, okay, which is selling the business, right?
And what if it’s not in the client’s best interest to sell the business? And the answer is don’t worry about it. And I did worry about it. And I, there was a, there was an emotional distance there that I could not fully reconcile. After a failed abortive attempt at a PhD at Georgia Tech, where I lasted about as long as the Chevy Chase talk show, I I bounced around doing some contract work for a while.
And then my wife, without my knowledge, applied for a business valuation job with a boutique firm in Atlantis. They called me Asked him for an interview and I almost hung up on him because I wasn’t expecting. I thought it was a cold call they were trying to get me to a Multi level marketing pyramid scheme or something for herbal life.
I didn’t know but I didn’t hang up on him and I said Called my wife said the funniest thing happened is people just offered me a job out of the blue. I said Oh, i’m so glad they [00:16:00] contacted you. Anyway, that’s when I found out that she applied And I initially resisted it because I told you that my parents did very well financially.
My father did very well financially, principally because he ran the business valuation practice for Ernst Young North America for about 20 years. And his valuation clients were AIG, Enron, the New England Patriots, among others, or actually National Football League. Is he the NFL, the New England Patriots?
I forget which one, but you get the idea. And you can take this as kid bragging about his dad, or you can take it as an attempt to be analytical. He was the LeBron James of the business valuation profession, in my view. He wiped out, he wiped out people in court and expert testimony. I can’t tell you how many careers he likely ended because of how roundly [00:17:00] he defeated people in court.
He was that good. And I’m like, how do I compare to this? And I’m always at best thing. And we’ve seen as my dad’s kid. Excuse me. So I resisted that for the longest time. But I discovered over time. It’s the only thing that I’m good at that I can make a decent living at that is legal. And so I fell into business valuation.
I took a flyer on it and it turned out that I could carve out a little niche for myself. Whereas my dad again did global companies, multi billion dollar cases That’s not my that’s not my bailiwick, my dad looks great in a three thousand dollar suit still does I look like an idiot in a 3, 000 suit.
I might as well, I might as well be barefoot. It’s just, it looks uncomfortable. It’s uncomfortable to see me in one. But in, in the space where I play, which is companies up to about 1, 500 million. [00:18:00] That’s where I relate to people. That’s where I seem to be able to bring enough value.
So over time, I learned that there are real people, just like I worked with in, in Minsk and Kiev, that I could use my finance skills to be hands on and to make a real difference in people’s lives. And so I got into that line of work almost 20 years ago and still going strong.
Porschia: That’s great. That’s great. You said a lot there about your father and. I’ve heard from a lot of our clients about, choosing careers or not choosing careers because they didn’t want to feel like they were, in a parent shadow. So it’s great that you were able to carve out, your own niche within business valuation.
But for those who don’t know, what is business valuation?
Mike: So business valuation Is figuring out the value of a business or in a parallel line of work intangible assets or intellectual property. [00:19:00] So most of us are familiar with. Real estate appraisers. I do the same thing as a real estate appraiser, but I do it for businesses and intangible assets.
Porschia: So when would a business owner or an executive team need a business valuation?
Mike: So [00:20:00] we could take up the entire podcast with a list of this thing, but we’re not going to do that because that’s not fair to the internet. For general reasons why one is there’s a transaction. You’re going to buy a business, sell your business.
You’d never sell your house without getting it appraised. You wouldn’t buy one same thing with a business. And that’s where I do a lot of my work. Also when somebody is going to raise money for their business or invest in a business valuation comes in to, to play there too.
And we help clients with that. There’s another group of valuation needs that I do some of, not as much. In compliance, there are certain tax events that require evaluation, usually the transfer of an estate or gifting a business to another generation, something like that, that requires evaluation under U.
- Law. There are certain accounting requirements for valuation. You might have heard of fair value accounting. It’s people like [00:21:00] me that make that go. We tell the accountants what number they should put in the On their balance sheet of the income statement, depending on the assignment. And then the final grouping is dispute resolution, which I don’t do personally.
My dad did was very, was, like I said, it was excellent data. And what that means in English is that in a civil case where you’re fighting over the value of shares or business damages, something like that, the lawyer’s job is to argue to the court who broke the law, and the experts job. Somebody like me has a job of telling the court what the number ought to be.
So transactions. Taxes, accounting, litigation disputes. Those are generally the four kind of categories of reasons that somebody would reach out to somebody like me for help,
Porschia: right? So I find that many entrepreneurs and executives have [00:22:00] different ideas about how to value a business from your perspective.
What are some of the best ways to estimate the value of a business?
Mike: Yeah. It’s funny. One thing I say about our profession is. We’re a genius if our value conclusion is roughly what the client thought it was going to be. And we’re a moron if it’s materially different. And that’s just the nature of what of the profession you’ve chosen.
But, to my mind, There is no best methodology that the best methodology is the one that’s best supported by the data. And in some cases, there are businesses where take restaurants. For example, there are tons of restaurant transactions all over the place. It’s very easy to determine the value of a restaurant because you can find comparable restaurants all over the place.
On the other hand take a startup data analytics company with no track [00:23:00] record, right? That it may be difficult to find comparable companies. And therefore, you have to rely on something that’s more aligned with cash flow, or you can’t rely on purchases of companies, but you have to rely on data involving venture capital investments in those kinds of companies, because that’s how the market works.
Or maybe there’s a company that’s failing and you wouldn’t use either of those two, but rather you figure out what’s the value of its assets. If you’re just gonna sell it off piecemeal, we call that liquidation value. So there is no one single methodology, at least in my mind. What I tell people is I go where the data takes me.
Wherever I find the data is the most reliable, abundant, credible, that’s where I’m gonna go. And if I’m really lucky, there’s enough data where it enables me to use multiple methodologies, and the hope is that they all more or less point in the same direction. That’s what gives me the opportunity to do my happy [00:24:00] dance.
Porschia: So from your perspective, what are some of the biggest challenges you’ve seen entrepreneurs and leaders have with business valuation?
Mike: I think what I think when entrepreneurs struggle with business valuation is they’re not quite sure what to do with it. And, they know they need a valuation and they often have the misconception that if they put a valuation on the table in front of an, in front of an investor, that the investors goes, Oh that’s what this guy says.
The business is worth. So I guess I better make that investment at that valuation. And that’s absolutely not the case. In fact, I tell clients all the time, doing that will lessen your chance of an investment, not increase it. An investor, unless they’ve hired me, an investor has no interest at all. And what I [00:25:00] think their business is worth, unless I’m prepared to write a check as a lead investor, right?
Then they’re interested. But if I’m, if I have no skin in the game like that, they’re not interested. I think on the executive side, the biggest challenge is they often realize they need a valuation too late. They’ve either committed an action, for example, they’ve granted shares to an employee and decided after they grant the shares, now I want to know what the value of the shares is.
That’s great, right? But it would have been much more useful to you had you known in advance. So you could have planned what that looks like or if it’s the case of a client that wants to buy the business, they’ll call me and say, I want to close. I’m buying this business in a week.
Can you do an appraisal? I said, I’ll say, Nope. You either got to push back the appraisal or you got to do something that the close, you got to do something else because [00:26:00] I cannot do a good, even if I had nothing else going on and I haven’t had nothing, I haven’t nothing else going on in about 20 years.
You had nothing else going on. I couldn’t do that in a week and do a good job, right? Or, and the most difficult part is somebody that needs to sell their business. They’ve been hopping along and maybe, they’re calm in their sixties and then they get some bad health news and they realize they’re not going to be able to continue with the business in some fashion.
They got to sell within a year, but their business is not all that attractive. Right now, whereas had they spoken to me three years ago, five years ago, I could have helped them put programs in place that would have made their business quite valuable, but again, it’s the timing when, when they wait too long to call me, my intellectual capital very much gets sidelined and my opportunities to help them are quite limited.[00:27:00]
Porschia: Yeah waiting too late is definitely a major challenge, I think, in business in a lot of ways, and I could definitely see how it can cause some major issues by issuing stock or things like that before knowing the real value. So tell us more about high score strategies.
Mike: Yeah, so my wife and I own this firm.
We set it up last year and it was the vehicle for us to move to Portugal and to be independent. So as you said, in my bio I love video games. I’m from the Atari generation, behind me here, you can see an old Atari 1040 16 bit computer, one of the jewels of my collection. And back when I lived in Atlanta, I used to have arcade games in my background and everybody would love them, right?
Yeah, everybody. Everybody, when they first saw them, had a smile on their face, and they all had some memory of playing Pac Man or Dig Dug or Ms. Pac Man, whatever. And it brought back a memory and I just love the joy that it gave them. [00:28:00] I don’t have new arcade games yet. We couldn’t move them to Portugal.
It’s prohibitively expensive. They wouldn’t work on the electrical current anyway. But I did want to, I did want to put that into our name, because I think everybody, whatever they do, they want a strategy to achieve the highest score. And so what we do is, we use valuation. As the starting point to help our clients achieve the highest score they can in whatever strategy game they’re playing.
Porschia: I love that. I love that. We can tell that you obviously do that through business valuation, but what are some other ways that you help your clients?
Mike: One thing I’m helping my clients a lot with now, and this is by accident, is helping clients plan how to commercialize their intellectual property.
A lot of companies have IP lying around. They’ve got patents, data, trade [00:29:00] secrets, software that they’ve developed, but they don’t know how to monetize. And it occurred to me, and this is what I was doing very early in my career, both with USAID and later on in venture capital. I was all about that. And I stumbled on the fact that there’s a great need for people who need advice on how to get hold of their intellectual property and turn it into a productive asset for them.
So by accident, that’s turning into a nice little consulting business for us.
Porschia: So we’ll be providing a link to your website and other social channels in our show notes. So people can find you online, but what is the best way for someone to get in touch with you?
Mike: So I’m not hard to find as I’m probably you’ve discerned over the internet. So you can find me on LinkedIn at unbreakable Facebook at unbreakable Twitter threads, sorry, X.
The site formerly known as Twitter at Unbreakable, [00:30:00] Instagram at Unbreakable. We have a YouTube channel now called Your Business Value. Interestingly enough, it used to be called High Score Strategies, but YouTube killed it because it sounded too much like a video game channel. So they wiped their channel out.
And you’ll find me through any of those channels and if all else fails. And Blake at highscorestrategies. com is the email address.
Porschia: Great. Mike, I want to ask you our final question that we ask all of our guests. How do you think executives or professionals can get a positive edge in their career or with their business?
Mike: Yeah, this is to me, I think it’s a very clear answer is. leverage social media to build a social media brand. And a lot of people shy away from social media as well. I can’t write or everything’s already been talked about. And it reminds me of somebody in 1895, who said that there’s nothing more to patent because everything had been invented.[00:31:00]
It’s so easy to build a brand for yourself being known for something. Even if you’re a first time job seeker, show people that you can write, show people that you’re curious about the field that you’re in, show people that you care enough that even when you’re not being paid, you think about that, you think about that field and how to make it better, how to contribute to it.
And, there’s so much opportunity out there for social media. I understand social media can be a highly destructive. And cynical force. I get it, but it does not have to be rise above it. Make your voice heard. There’s always room for another voice.
Porschia: Great. Great. Mike, you’ve shared a lot of insights with us today, and I’m sure that our listeners can use it to be more confident with their businesses.
We appreciate you being with us.
Mike: Thanks so much for having me as a fun conversation. [00:32:00]
