Private Company Valuation 2026: Methods + 3.5x-7.3x Data

1. 01

   Private companies sold at a median 3.5x EBITDA in Q4 2025 across all transaction sizes (DealStats Value Index).

2. 02

   PE-sponsored deals from $10M to $500M averaged 7.3x, ranging 6.4x under $25M to 10.3x above $100M (GF Data).

3. 03

   Size explains roughly four turns of multiple spread — more than industry does.

4. 04

   DLOM on a private stake usually runs 30-50% (Corporate Finance Institute); stack DLOC on top and the two discounts compound rather than add.

5. 05

   A DCF, a comps range and an asset floor that agree within 20% is what makes a valuation defensible.

6. 06

   Owner dependence and customer concentration reduce the multiple until they are documented away.

Private company valuation is only useful if it holds up under pressure. The benchmarks give you the starting band — 3.5x median across all private transactions, 7.3x for sponsored deals, with four turns of spread explained by size — but the number you actually achieve is decided by evidence: normalized earnings you can document, a discount rate you can justify, and a risk profile a buyer cannot use against you.

Start by normalizing earnings with the EBITDA calculator, pressure-test the result with the DCF calculator, and compare the output against your size band. If you want a formal baseline you can hand to an adviser, build a valuation report and validate it against a realistic discount rate. For the broader method, our guide on how to value a business covers the same ground for owners who are not yet at the private-comparables stage.

Protect the assumptions and you protect the outcome.

How do you value a private company?

Normalize the company earnings (EBITDA or SDE) by removing owner-specific and one-off costs, apply a multiple drawn from comparable private transactions in the same enterprise value band, cross-check that result against a discounted cash flow model, and then apply discounts for illiquidity and, where relevant, lack of control. A valuation is credible when the earnings multiple, the DCF, and the asset floor produce answers within roughly 20% of each other. A single method, used alone, is an estimate rather than a valuation.

What is a typical private company valuation multiple in 2026?

It depends heavily on size. The DealStats Value Index reported a median selling price to EBITDA of 3.5x in Q4 2025 across private transactions of all sizes, including small asset sales. GF Data, which covers private-equity-sponsored deals from $10M to $500M in enterprise value, reported an average of 7.3x for the year to Q3 2025 — with $10-25M deals at 6.4x, $50-100M at 8.3x, and $100-250M at 10.3x. Roughly four turns of that spread is explained by company size rather than industry.

What are the main private company valuation methods?

Three: the income approach (discounted cash flow), the market approach (multiples from comparable private transactions), and the asset approach (net assets restated to fair market value). The income approach leads when cash flows are predictable or contracted, the market approach leads when there is real deal flow in your size band and sector, and the asset approach sets a floor for asset-heavy or loss-making businesses. Professional appraisals run all three and reconcile them rather than choosing one.

How do you value stock in a private company?

Value the whole company first, then adjust for the specific stake. A minority holding is worth less per share than a controlling one because it cannot direct dividends, hiring, or a sale. Apply a discount for lack of marketability — the Corporate Finance Institute puts the usual range at 30-50%, though it must be evidenced for your company — and a separate discount for lack of control where the stake carries no governance rights. The two compound rather than add: a 20% DLOC followed by a 20% DLOM cuts 36% off the pro-rata figure. This is why per-share value for an employee share scheme sits materially below enterprise value divided by share count.

How large is the discount for lack of marketability?

The Corporate Finance Institute puts the usual DLOM between 30% and 50%. In practice the number is company-specific: option-pricing models applied to a single business often produce lower figures, and one published worked example derives 32% from a two-year expected exit and 64% volatility. Practitioners are explicit that no universal DLOM range exists, and that the discount must be supported by evidence on expected holding period, transfer restrictions, distribution rights, information access, and the likely buyer pool. A DLOM lifted from a generic table is the first thing an opposing appraiser will attack.

How is private company valuation different from public company valuation?

Public companies have a quoted price, audited disclosure, and instant liquidity. Private companies have none of those, so valuation rests on assumptions, documented cash flow, and risk adjustments rather than on an observable market price. The practical consequences are that private valuations are expressed as a range rather than a number, that comparables must come from private transactions rather than trading multiples, and that illiquidity and control discounts are applied on top.

Why do private companies sell for lower multiples than listed peers?

Three reasons compound. Illiquidity: there is no market to sell into, and the Corporate Finance Institute puts the usual discount for lack of marketability at 30-50% on a private stake. Size: smaller companies carry more concentration and key-person risk, and GF Data shows roughly four turns of multiple spread between the sub-$10M-$25M and $100M-plus enterprise value bands. Information asymmetry: a buyer cannot verify a private company numbers as cheaply as it can read a listed company filings, and it prices that uncertainty into the offer.

Can I value my own private company?

You can build a credible working range yourself, and you should — going into a negotiation without one is how owners get anchored by the buyer number. Normalize your earnings, run a DCF, and compare against transaction comps in your size band. What an independent report adds is defensibility: a buyer advisor will discount your own figures on principle, and an external valuation with documented assumptions reduces disputes and shortens diligence. For a sale, a court matter, or a share scheme, use an independent appraiser.

What financial information do you need to value a private company?

Three to five years of profit and loss statements, balance sheets, and cash flow statements, reconciled to filed tax returns. On top of that: a schedule of add-backs with supporting invoices, a monthly working capital history covering at least twelve months, a customer revenue concentration table, the current order book or contracted revenue, and a fixed asset register. Missing or unreconciled records are the most common reason a valuation range gets cut during diligence.

How often should I update a private company valuation?

At least annually, and again after any material change: a large new contract, a price increase, a margin shift, the loss of a key customer, or a change in ownership structure. If you plan to sell within 12 to 24 months, update every six months so you can see the trajectory rather than a single snapshot. A valuation that is more than a year old will be treated as stale by a buyer and by most courts.