Appraising an illiquid interest in a business is a complex process involving quantitative analysis and professional judgment. Anyone can have an opinion of what a business is worth. What makes one opinion more credible than another? Research, analysis, experience and communication.

At Shearwater Valuation Associates, we begin the appraisal process by focusing on the non-financial aspects of the business. We build a complete understanding of the business, its products & services, customers, competitors, owners, managers and employees. We identify distinct competitive advantages, as well as unique risks that are relevant to the appraisal.

After developing an understanding of the business, we perform thorough financial analyses and industry benchmarking. We develop long-range financial forecasts, as well as an appropriate rate of return investors would require for an investment in the business. We consider the value of the assets held by the business. We consider the pricing of comparable publicly traded securities in the industry. We consider mergers and acquisitions that have occurred in the industry. Finally, we evaluate any discounts, premiums or other factors that are relevant.

However, comprehensive research, thorough financial analysis and sophisticated financial modeling are not enough to prepare a credible appraisal. To be truly effective, a credible appraisal must lead the user to the conclusion that the estimate of value is reasonable. At Shearwater Valuation Associates, our estimates of value are communicated in professionally prepared, comprehensive, yet easy-to-understand, appraisal reports that satisfy the technical standards of regulatory and credentialing organizations.