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
10 or 15 years of business owner-operator experience is required to build the gut-brain axis — as pilots, surgeons, and business valuators should have before they take people's lives and financial lives in their hands. See my Experience page for more details.
Why is this so important to the question: Shareholder agreement requires a valuation – what does that mean?
When a shareholder agreement requires a valuation, the stakes are immediate and legally binding. Getting the value wrong — even slightly — can trigger litigation, force a buyout at an unfair price, or destabilize the company. This is exactly why the gut-brain axis matters: only someone who has operated a real business understands how a trigger event (death, dispute, retirement) actually disrupts operations, shifts power, and changes the economic picture overnight. Clinical formulas miss this entirely.
The Result
You get a valuation that respects the agreement while reflecting real-world conditions, reducing disputes and escalation.