Fast-growing private companies are hard to value because past profits say little about the future. Family offices that invest in them usually focus on a few questions rather than one formula.
What to look at
- Quality of revenue. Recurring or one-off, concentrated or spread across many customers.
- Unit economics. Whether each new customer adds profit or loses money.
- Cash needs. How much more capital the company will need, and how much your stake could be diluted.
- Comparable deals. What similar companies were valued at, and why.
- Terms. Preferences, board seats and information rights can matter as much as the headline valuation.
See what family offices look for before investing in a deal and the due diligence fireside chat with Marc Halpern.
Educational only. Nothing on this site is investment, tax, legal, accounting or other professional advice, or a recommendation on any security, manager, structure or allocation. Speak with qualified professionals before acting.