A room with more than 40 CFOs and CEOs of family-owned businesses. A full day at Católica-Lisbon SBE discussing what is rarely said out loud: what is a family business really worth?
There was one sentence that lingered in the auditorium at Católica-Lisbon SBE last Friday, March 20. It was said by Nuno Caldeirinha, CFO of VINCI Energies Portugal, and it captured, with striking clarity, what had been discussed throughout the day about valuations and mergers and acquisitions in family businesses: “A successful M&A deal is not the one with the highest multiple, but the one everyone can live with five years later.”
This was the spirit of the Family Business Financial Forum, organized by the Family Business Platform at Católica-Lisbon SBE in partnership with Patrick Ohle of FBXperts, Vieira de Almeida & Associados, and the Associação das Empresas Familiares. CFOs and CEOs of Portuguese family businesses gathered to discuss a topic that sits at the core of many strategic decisions but is rarely explored with this level of depth: how do you value a family business? And what happens when you decide to sell?
Starting from the beginning: how do you value a company?
Filipe Santos, Dean of Católica-Lisbon SBE, opened the session with a reflection on the purpose of a family business. But it was Pedro Barroso, whose research focuses on financial market anomalies, who set the tone in a deceptively simple way: the value of any company rests on three pillars: profitability, growth, and risk. Yet each of these pillars is, in itself, a minefield.
On profitability, the issue is sustainability. “It’s forever,” Pedro Barroso emphasized, referring to the logic of discounted cash flow: a company is worth the sum of everything it will generate, discounted to present value. In a capitalist economy, competition erodes margins. What is profitable today attracts imitators tomorrow.
On growth, the danger lies in extrapolation. This became clear through a classic example: if Google had maintained the growth rate it achieved between 2008 and 2013, in 43 years its profits would equal the entire GDP of the United States. The absurdity of the number is the point. High growth is always temporary.
On risk, the most used model is the Capital Asset Pricing Model (CAPM). Yet more than 400 anomalies have been documented that CAPM cannot explain. The irony is that investors seem to use CAPM intuitively when selecting investment funds, even though academics are aware of its limitations.
The conclusion? There is no single, objective value for a company. There never has been.
The human side of a number
This is where family businesses introduce an additional layer of complexity. Maria Cunha Matos, a lawyer at Vieira de Almeida & Associados and a specialist in complex transactions, spoke about the structural shift required to navigate transactional complexity in family businesses.
In a family business, valuation is not just a financial exercise. It is a conversation about identity, legacy, control, and often about relationships between siblings, cousins, or generations, where anticipating challenges and preparing for them is critical to the success of the transaction.
Nuno Caldeirinha offered the CFO’s perspective with refreshing honesty. His thesis: the CFO in a family business is not an accountant. He is a translator. He translates emotion into finance, narrative into numbers, and unspoken expectations into contractual structures.
A new path: entrepreneurship through acquisition, preserving legacy
Diogo Almeida Alves and Lara Vidreiro, from Legacy Innovation House, introduced the forum to a concept still relatively unknown in Portugal but growing in the United States, the United Kingdom, and Spain: Entrepreneurship Through Acquisition (ETA). The idea is simple: instead of starting a business from scratch, an entrepreneur acquires an existing company, typically a family-owned SME without a clear succession plan and takes over its leadership and development.
For family businesses without heirs willing or prepared to continue, this model represents an alternative to selling to a fund or a competitor. The legacy remains, it evolves and gains new momentum in the hands of someone who has actively chosen that business and its mission, continuing its story.
What remained in the room
After a full day of presentations, panels, and informal conversations, one thing became clear: valuing a family business is an exercise in both humility and rigor. Humility to accept that there is no single correct number. Rigor to build the best possible assumptions and be ready to defend them or revise them.
Above all, there is an awareness that financial decisions in family businesses are rarely just financial. They are decisions about who we are, what we have built, and what we want to endure.
Liliana Dinis, Family Business Researcher at Católica-Lisbon SBE