Eleven uses for a private company valuation.

Whether you are an entrepreneur planning to sell, an investor exploring an opportunity, or a legal professional working through a dispute, the value of a private company sits at the centre of the decision. Unlike listed companies, private businesses have no observable share price, so value has to be established deliberately.

Eleven contexts in which a private company valuation is used

Buying and selling

Private equity purchase or sale

A robust valuation sets a realistic baseline for negotiation and gives both sides something defensible to work from.

Acquisition or divestiture

The buyer needs assurance they are not overpaying; the seller wants to establish that the unit is worth more than its contribution to group earnings suggests.

Raising capital

Venture capital

Early-stage companies raising venture funding use valuation to determine how much equity an investor receives for their capital.

Debt raise or refinancing

Lenders are assessing repayment capacity and the value of their security.

Public equity (IPO)

Listing requires a valuation to set an initial share price and align expectations between founders, existing investors and the market.

Disputes and distress

Corporate disputes

Disagreements between co-founders, partners or directors frequently require an objective valuation to resolve.

Shareholder disputes

In minority oppression matters and shareholder exits, valuation is what protects the rights of the party without control.

Insolvency and business rescue

The central question is whether the company is worth more as a going concern than in liquidation.

Compliance and reporting

Tax and SARS

Estate planning, capital gains events and corporate restructuring all require a value to be established for tax purposes.

Financial reporting

Valuation supports reporting under IFRS, particularly for goodwill impairment testing, asset revaluation and purchase price allocation.

Share-based compensation

Private companies issuing equity to employees need a defensible share value for tax and accounting purposes.

Which one applies to you

The purpose determines the exercise. Scope, method, level of evidence and the form of the report all change depending on whether the reader is a buyer, a lender, a court or SARS. This is why we agree the purpose in writing before any work starts.

If you are not sure which of the eleven applies, that is a normal place to start — get in touch, or read how we approach company valuations, financial due diligence and transaction structuring.