A Comparison Of Alternative Approaches To Equity Valuation Of Privately Held Entrepreneurial Firms

Valuation of small entrepreneurial businesses requires identifying features that are not generally considered in the valuation model of large public firms. The challenge is to translate financial theory into a practical, available measure that can be employed as a proxy for valuation of small and entrepreneurial businesses, which are not publicly traded. This paper seeks to expand the list of valuation metrics for estimating the value of non-publicly traded firms by incorporating empirically determined explanatory factors to examine the relationship of performance measures and the value of the firm.