What makes private company valuations special is the ambiguity and room for independent evaluation that exists when compared to a publicly traded business. You’re operating with less current and historical data, lower transparency on future business performance, and the capital structure of the company may not be completely accessible. There’s also the question of accounting: private companies are not bound by traditional Generally Accepted Accounting Principles (GAAP) regulations and enjoy a lack of strict reporting requirements.

Typically, firms that have been taken over have a control premium attached (i.e. the acquiring entity pays over the odds to have a controlling stake in the company’s daily operations). Comparing a potential target to recent transactions can help account for any disparities due to the control premium and evaluate the target firm’s value from a better position.

Read more about PRIVATE EQUITY VALUATION METHODS[https://www.uspec.org/blog/all-you-need-to-know-about-equity-valuation-methods[color=#000099][/color]][/url]