Private Company Valuation Techniques

Private companies have major importance in the world’s economy albeit often smaller in size and less financially transparent than their publicly traded peers. Among the +300,000 firms operating in the United States that generate greater than $10 million in annual revenues, roughly 90% are privately-held companies. A privately-held company is owned either by non-governmental organizations or by less than 2000 shareholders so as not to require reporting with the Securities and Exchanges Commission. The private company’s owners do not publicly issue or trade shares of the private company, instead, they keep ownership and associated transactions discreet.