🧮 How to Value Unlisted Shares: Top Four Methods Explained

Summary: Placing the right price on unlisted equity is part art, part science. Here are four core valuation techniques—when to use each, and their pros & cons.

1. Discounted Cash Flow (DCF)

Forecast future free cash flows and discount at a rate reflecting both business and liquidity risk. Ideal for profitable, mature firms.

2. Comparable Company Multiples

Apply P/E or EV/EBITDA multiples from listed peers, then discount 20–40% for illiquidity. Works well for high-growth startups with public comps.

3. Book Value / Net Asset Value

Use balance-sheet net asset figures. Best for asset-heavy businesses (real estate, manufacturing) but can undervalue intangible-driven ventures.

4. Precedent Transaction Analysis

Review recent private‐market deals in similar companies. Data can be thin—supplement with multiple rounds of market checks.

Putting It All Together

Combine methods to triangulate a fair price: weight each per its relevance to the company’s industry, stage, and financial profile.