The Valuation Trap

A private company’s valuation are nothing more than a person’s opinion and may vary widely.

The value of a company, referred to as its valuation, is very difficult to calculate for a privately held company. It is only an opinion and generally represents what an investor is willing to pay for an equity stake in the company. But, it is only one factor in determining the ownership and control of the company. Other terms could have a much more significant impact.