Options: Fair Market Strike Price Valuations

The valuation of stock options' strike price at fair market value requires the use of objective financial methods. The most commonly used approach is the Option Pricing Model and it is used to estimate both the ordinary share value considering the preferred returns that apply to company's preferred shares, and also the discount for lack of marketability.

The Fair Market Value in 3 Steps

Step 1

Reference Valuation

The starting point is the company valuation, which is either determined by a recent fundraising round or must be calculated in the absence of recent capital transactions.

This first valuation is the starting point of our analysis, which will allow us to measure the value specifically different classes of shares.

Step 2

Ordinary Share Value

In the presence of preferred returns in the shareholder agreement - which grants to preferred investors a priority in the liquidation order in case of exit - it is necessary to calculate the difference in value between preferred shares and ordinary shares while taking into account the waterfall specified in the shareholder agreement. The value gap will then be measured by applying option pricing and Black & Scholes mathematical formula.

Step 3

Discount for lack of marketability

The discount for lack of marketability makes it possible to adjust the value of an illiquid security, held by a minority shareholder, having specific rights within the company (lock-up clause, approval, promise of sale, etc.).

This discount is applied on the ordinary share value and is determined by a Put Protective Approach.

Un processus simple et itératif

Collection of information

You will be asked to send us the information required to complete the financial assessment.

Interiew with an analyst

An interview with our analyst is carried out to clarify the information received and methods to be considered.

Adjustments

A second interview is organized to refine the assumptions made and the results with you.

Valuation report

A valuation report that presents the results and hypothesis will be sent to you.

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Nous accompagnons les entrepreneurs dans leurs opérations sur le capital.

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Chaque entreprise est unique. Nous utilisons les méthodes d'évaluation financière les plus adaptées à votre stade de développement et votre secteur.

Conformité locale

Nos évaluations financières sont conformes aux exigences de chaque juridiction. Notre expérience vous garantit fiabilité et sécurité.

Équipe dédiée

Notre équipe est à vos côtés tout au long du processus d'évaluation financière, de l'offre de conseil à la fourniture du rapport, pour un meilleur service client.

Prenez rendez-vous avec nos analystes pour en savoir plus.

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accurate valuation for keeping moving safely

We support entrepreneurs in their capital operations. Make an appointment with our analysts to find out more.

Tailored made

Every business is unique. We use the valuation methods that are best suited to your stage of development and your sector.

Locally compliant

Our valuation reports comply with your local requirements. Our experience guarantees you a reliable and safe valuation.

Dedicated team

Our team is at your side through the valuation process, from offering advice to providing required support. Our focus is to provide the best customer experience.