Ep. 443 — Graham & Kyle: How to Value Your Business Without the Bullsh*t

6 min read

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Episode Summary

Your CPA quoted you $50,000 for a valuation that took six weeks and produced 50 pages of CYA, and the actual number you needed could have come from a 30-minute conversation. That is what Graham’s co-founder Howard found out in the middle of Covid, and it is what kicked off Bizval. I sat down with Graham Stephen, the co-founder, and Kyle McCulloch, who came to the company by way of commodity derivatives trading, global macro research, and a small-business turnaround that humbled him. We got into why market multiples lose their meaning the moment the interest rate environment shifts, why a normalized cash income statement is the only honest answer to “what is it worth,” and the five-step framework Graham uses to walk an owner-operator from “tell me about your business” to a defensible cash flow valuation without an accountant in the room. The owner question that breaks most businesses came at the end. Can you take a three-week vacation and the business actually runs better, or are you the episode of The Bear where a three-minute bathroom break creates chaos. The honest answer to that question is the valuation.

Top 10 Takeaways

  1. Your $50K valuation report is mostly CYA. The number you actually need fits on three pages.
  2. Market multiples only work in stable environments. Change interest rates or inflation, and the multiple loses meaning.
  3. Cash flow is gravity. Normalized EBITDA and multiples are proxies people argue about while the ground moves.
  4. The owner test that exposes the truth: take a three-week vacation, see if the business runs better.
  5. If you don’t know your fundamental value, you can’t tell a fair offer from a strategic premium.
  6. EBITDA forgets to replace your trucks. Build a replacement cost proxy or you’re lying to yourself.
  7. Customer concentration and repeat business matter more than your accounting system’s brand name.
  8. Owners know the answers. They just don’t have the words. Your job is translation, not jargon.
  9. Valuations are forward-looking. Your six-pack five years ago does not pay this year’s payroll.
  10. The risk-free rate is not risk-free anymore. If money debases 8% a year, your bonds lose ground.

Sound Bites

“There’s a lot of people in the industry, from banking to M and A to accounting, who quite frankly have a vested interest, and it might sound controversial, to make some of these things seem really complicated. At the end of the day it’s actually not that complicated.” (@00:30:00) — Graham Stephen

“Favorite saying is, I think it’s an ancient Chinese proverb. When the finger points at the moon, the idiot looks at the finger.” (@00:43:41) — Kyle McCulloch

“I can go away for three weeks without a mobile phone, sitting in the Bahamas, and my business actually is unaffected. It even does better when I go away. Through to an episode of The Bear where it’s like, listen, if I take a three-minute bathroom break, I’m going to have chaos on my hands.” (@01:25:50) — Graham Stephen

“Anybody can take something simple and make it sound complex. We’ve tried to take something which is fairly complex and make it simple.” (@01:13:00) — Graham Stephen

“You can’t wait for the fire to be burning your toes, watching it coming towards you, before you jump. You’ve got to think how can I prevent this fire from getting to me.” (@01:18:50) — Kyle McCulloch

About This Episode

Graham Stephen is the co-founder of Bizval, a tool that produces a defensible cash-flow-based business valuation from a 30-minute conversation with the owner. A chartered accountant by training, Graham spent 15 years inside South African banks before joining a fintech startup, eventually becoming a fractional CFO and meeting his co-founder Howard, who had just paid one of the Big Four $50K for a 50-page valuation report he didn’t need. Kyle McCulloch joined the team in late 2024 from a background in commodity derivatives trading on Wall Street, global macro and geopolitical cyber risk research, and a small-business turnaround on the West Coast that taught him just how messy real owner-operator businesses are under the hood. The three of us got into why most valuation tools (and most CPAs) are answering the wrong question, and the five prompts that actually get you to a number worth defending.

Resources Mentioned

  • Bizval — Graham and Kyle’s valuation tool, built to produce a cash-flow-based valuation from a 30-minute owner conversation.
  • Broken Money by Lyn Alden — Referenced for the framing that CPI has no unit of account and the macro view on money debasement.
  • Michael Saylor — Referenced for the buildup methodology of weighted average cost of capital and the MicroStrategy treasury thesis.
  • Raoul Pal / Real Vision — Referenced for the correlation between debt growth, aging population, and money supply expansion.
  • Charlie Munger — Referenced for calling EBITDA “bullshit earnings” because of CapEx.
  • Joe Brown / Heresy Financial — Referenced for the framing that the heretics are usually right.
  • The Bear (FX series) — Referenced as the owner-dependency stress test (“if I take a three-minute bathroom break, chaos”).
  • Mike Tyson — Referenced for “a person who is friends with everybody is an enemy to themselves.”

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