The Intent
You are selling or buying less than a controlling interest and want to understand what that ownership is truly worth.
How I Solve It
I start by determining total enterprise value using the 25 Factors Affecting Business Valuation, then analyze how minority ownership changes value. Factor #21: Minority Interest, Factor #5: Liquidity, Factor #24: Risk, and Factor #22: Special Interest Purchaser are central. A minority interest is not simply a percentage of total value; it reflects reduced control over decisions, distributions, and exit timing.
The 5 Senses Inspection Report helps confirm whether minority shareholders have any real operational influence or whether control is centralized regardless of share structure.
Experience
It is vital because "How do you value a minority share in a business?" 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 receive a minority interest valuation that reflects real control, liquidity, and risk constraints.