Our client, a rapidly expanding unlisted technology start-up, asked for our help to value a new share option plan for its senior employees. The situation was unusual because the company was unlisted, with no active market in the shares and there were no obvious comparator companies to refer to as a basis for the valuation.
We worked with the company’s finance director to develop a bespoke approach for valuing the company’s unlisted shares, taking into account a discount for the minority status of employees’ shareholdings and the particular features of its executive share options.
The outcome was an approach which satisfied the accounting standard but also gave the finance director a clearer understanding of the impact of granting new share options. They are now able to provide evidence of a robust valuation model which has been signed off by their auditor.