Private-company valuation is no more an art or a science than journalism is.
Private-company valuation, like journalism, is neither art nor science.
We generally think that private companies are given a lower valuation (for any particular set of profits or resources) simply because they are private.
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For example, investors in hedge funds and private equity face uncertainty about precise valuation of their investment.
Other technology firms and investment banks are racing to raise capital and hatch potential IPOs because of the sky-high valuation Facebook is establishing with its private share offering and infusion from Goldman and DST.
Hawkins and Cates completed a lengthy sum-of-the-parts valuation of Dell that blasted the founder and private equity shop Silver Lake Partners for low-balling.
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This month the Private Equity Industry Guidelines Group, a collection of big investors and private-equity funds, unveiled guidelines intended to help standardise the valuation of investments in non-listed companies.
Acquisitions are becoming increasingly complicated, as the failed Groupon deal and the sky-rocketing valuation of internet start-ups (in great part due to trading in private company stock through secondary markets) make clear.
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As bottom up, research driven, value investors, we at Teton employ many of the same metrics in the valuation of our portfolio candidates as criteria used by strategic corporate buyers, and private equity outfits.
Negotiations with private equity firm Blackstone for a sale of the telecom tower unit also reportedly fell through over valuation.
On valuation, people always seem to be overly enamored with market value, which has puzzled me because as a private company, there is no liquid market on which to buy and sell shares, so a valuation is established without any degree of market efficiency.
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Mr. Halligan declined to disclose HubSpot's valuation but said public-market investors offered 18% to 20% higher prices than typical private-company investors.
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