The Intent
You have triggered a clause due to death, disability, retirement, termination, or dispute, and the agreement says 'a valuation is required.' You want to know what that actually means in practice and what risks you face.
How I Solve It
I do not start with the wording alone. I apply the 25 Factors Affecting Business Valuation to determine fair market value at the trigger date, focusing on Factor #1: Purpose, Factor #5: Liquidity, Factor #21: Minority Interest, and Factor #24: Risk.
The 5 Senses Inspection Report establishes the operational reality at the exact moment of the trigger. This matters because value can shift materially depending on who left, why they left, and how the business reacts.
Experience
It is vital because "Shareholder agreement requires a valuation — what does that mean?" is not a mechanical calculation. It is a real-world judgment about risk, control, sustainability, and transferability — and that judgment is where 10–15 years of owner-operator and valuation experience, your gut–brain axis, does the heavy lifting.
Why It Is Not Mechanical
On paper, valuation appears formula-driven. In reality, governance rights, risk concentration, growth durability, market conditions, and stakeholder dynamics materially affect value.
Where Experience Changes the Number
Decisions around normalization, premiums, discounts, projections, and defensibility require judgment formed through lived ownership, negotiation, and financial accountability.
Why the Gut–Brain Axis Matters
The brain performs disciplined financial analysis. The gut recognizes unrealistic narratives, hidden leverage, emotional distortions, and deal risk. Together they produce conclusions that withstand scrutiny.
Protecting Financial Lives
The final number affects wealth, control, solvency, tax exposure, and long-term relationships. Requiring 10–15 years of serious hands-on business and valuation experience ensures the answer is fair, defensible, and durable. See my Experience page.
The Result
You get a valuation that respects the agreement while reflecting real-world conditions, reducing disputes and escalation.