Overview

The CEO's role is to bring the company/opportunity through the stages of the perpetuity by building recurring benefit streams (i.e. cash flows) and at the same time de-risking those benefit streams. In doing so, the valuation of the perpetuity moves from backward looking towards forward looking and the valuation is thus maximized (based upon a multiple of future earnings). The CEO should thus be familiar with perpetuity science and the phases of the perpetuity. The CEO is tasked with ensuring that the valuation of the corporation is maximized. We employ three methods to analyze the valuation of the corporation; CC, PT, DCF As the perpetuity changes, the formula for valuing the perpetuity changes as well. There are five phases of perpetuity building. As we move through the phases, the role of the owner of the perpetuity becomes more passive and the valuation becomes larger due to size of EBITDA increasing, EBITDA multiple increasing, and the discount rate decreasing. The perpetuity becomes less dependent on the owner to exist and run as an organizational structure is formed coinciding with the division of labor, processes are automated, and revenue becomes recurring. Ultimately, the CEO is tasked with taking a PV (sources & uses) and turning it into a FV that generates an interest rate (IRR) that meets or exceeds the interest rate on similar financial instruments in the marketplace. He does so by commercializing new science and converting it into a benefit stream and then a perpetuity. Benefit stream is a platform plus a database and conversion on this database in the form of transactions that generates a cash flow. Perpetuity is when the benefit stream becomes durable and recurring, allowing the company's ownership to be a passive financial instrument rather than an active one.

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