Arik Van Zandt discusses his reputation as a thought leader in the valuation industry, the challenges of cryptocurrencies, and how new technologies are affecting the business of divorce.
Arik K. Van Zandt, ASA, specializes in the valuation of closely-held businesses for the purposes of litigation support, buy-sell agreements, ESOPs, taxation, and more. Family Lawyer Magazine’s Editorial Director Diana Shepherd recently spoke with him about how he keeps on top of rapidly-changing technologies, his reputation as a thought leader in the valuation industry, his team’s commitment to providing extraordinary professional service, and what it takes to create – and keep – a talented team of business valuators with the drive to do good work.
What is the “personality” of your team of business valuators at Alvarez & Marsal: the core characteristics, values, and ethics you exhibit on a daily basis?
Arik Van Zandt: Our core values are integrity, quality, objectivity, and fun.
When you say “fun,” what do you mean by that? People don’t usually associate “fun” with a financial services firm.
We have a group of professionals who have worked together for a long time, and that says a lot in today’s work environment: if you can retain the same talented people long-term, you’re probably doing something right. Our team comes to work with excitement, desire, and drive to do good work for their family-law clients. The feeling of “fun” comes along with that.
What makes you and your team thought leaders in your industry?
Our professionals sit on industry task-forces that are establishing the way that we do what we do – and why we do what we do. Unlike valuators who are working with guidelines created by others, we’re out there creating those guidelines, we’re giving presentations in local and national markets. We bring that thought-leadership mentality to our work. Our mission is to have top-end quality professionals producing the best work possible within our core values. We believe we’re the best at what we do, and we treat our family-lawyer clients as if they’re the best at what they do, too. Our professionals all have very strong educational backgrounds, including a Masters in Finance and accreditations such as ASA, CFA, and CPA. Professional diversity and experience are essential to the way we conduct our business.
How do you keep on top of rapidly-changing technologies? For example, what do you do when something like Bitcoin forms part of the marital estate in a divorce?
We are doing quite a bit of work with cryptocurrencies and blockchain; in fact, I’ve given a presentation on the topic recently. Cryptocurrencies turn what we thought we knew about traditional currency on its head. The technology, how cryptocurrencies are used, and the value propositions are hard to grasp, so we need to be forward-thinking and stay ahead on technology every day. A valuation firm needs to have the ability and resources to work with big data, which includes better research tools and faster processing. Technology is clearly at the forefront of our practice. If you’re not staying ahead of new technology, then it’s going to get ahead of you.
“If you’re not staying ahead of new technology, then it’s going to get ahead of you.”
Since you can buy and sell cryptocurrencies anonymously, this really is the Wild West of investing. The rates can fluctuate widely, there are hacking concerns, and so on. How do you deal with those kinds of issues?
The volatility is certainly a scary factor for folks going through a divorce – especially because you have some moving targets for timing when you’re doing valuations and divorce work. When you have the high volatility that we see in cryptocurrencies, you want to make sure you’re pinning down the appropriate value when you separate these assets. The ability to hide assets is always a concern in divorce because there’s a lack of trust to begin with. Based on the anonymous nature of the transactions, the lack of intermediary third parties, and the lack of regulation, attempting to hide cryptocurrency is certainly possible in divorce. Forensic experts can make sure that the dollars are accounted for and that the assets are properly captured in their cryptocurrency space.
How frequently do you testify in court in family law cases?
In the divorce space, family lawyers hire me as an expert witness to provide a valuation opinion. Between myself and my partner, we probably testify two to three times a month – and over time, that adds up. We have staff being trained through the AICPA expert witness workshop and other forums to get them some experience so that, eventually, they can start to testify as well.
What is your team’s commitment to your family lawyer clients?
We’re part of the lawyer’s team when it comes to reaching resolution. We get involved in the divorce process as early as possible to help with discovery issues, identifying assets that must be valued, or issues to consider throughout the process. We are problem-solvers for family lawyers. Despite having many clients, we treat every client like they’re our only one. We are incredibly responsive, and we are committed to providing a level of professional service better than our clients have ever experienced before. We bring experienced professionals to every job. We’re not going to have a rookie do the bulk of the work and only provide a little bit of guidance at the end.
Have you always worked in the valuation industry?
I spent the first phase of my career doing valuation and litigation support work, then I became the CFO of a securities broker/dealer firm for three years. The company was growing and it had a complex ownership structure and business plan; I really learned from the ground up how a company works on a day-to-day basis. Now, when I have conversations with business owners who are going through a divorce, I understand their challenges and concerns because I’ve helped to grow a company and I know what that takes.
Is there a minimum size or potential dollar value to make retaining you to value a business a worthwhile exercise?
No. We take smaller assignments like determining the community vs. separate aspect of the vesting schedule for stock options. A lot of the valuations we do are for early-stage – sometimes even pre-revenue – companies. Those companies don’t have a lot of capital to spend on something like a valuation assignment. We have the techniques, resources, skills, and knowledge to be able to do that kind of work just like we do for multinational billion-dollar companies.
How do you ensure that nothing falls between the cracks and that you deliver your assignments on time?
I describe myself as being the team quarterback: to ensure we don’t drop the ball, it’s my commitment and daily challenge to know what the team is working on. I have an open-door policy with our staff, who come to me regularly with questions as they’re working through their projects. I’m very hands-on in our work product, and I work closely with my team as we execute those deadlines.
What do you enjoy the most about valuation work?
I really enjoy the variety of industries and clients I get to work with every day – it never gets stale. My learning curve will always have a slope to it, which allows me to challenge myself to stay ahead of the curve. I enjoy being a thought leader as well as ensuring that my team stays ahead of what’s to come.
Arik Van Zandt is a Managing Director with Alvarez & Marsal Valuation Services in Seattle. He specializes in the valuation of closely-held businesses and other assets, acquisitions, sales, buy-sell agreements, ESOPs, and incentive stock options. www.alvarezandmarsal.com
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