How Investors Value Private Company Stock
Valuation Methods  
(Slide 28  of 50)

• An almost infinite variety of methods can be used to value a company. 
• The classical definition of fair market value – what a willing buyer will pay a willing seller – offers little practical guidance to companies raising capital.
• The most common valuation methods are the market price method and the discounted flow method. Many think these methods provide the best and fairest valuation method for companies expecting dramatic growth.
• Both methods estimate present value based on projections of a company’s future performance. Neither is foolproof.
• A full discussion of both pricing methods can be found under the Pricing and Discounted Cash Flow entries in the Growth Company Guide.

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