EquityZen Knowledge Center

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Terms Tagged with Valuation

409A Valuation :A third party valuation of a company's common stock. Generally used by startup companies to help determine the exercise price for company stock options. For a deeper dive, see our blog post on 409A valuations (read both parts!).
Earnings before interest and taxes (EBIT) :A measurement of the operating profit of the company. A possible valuation methodology is based on a comparison of private and public companies' value as a multiple of EBIT.
Fair Market Value :The value of a company based on what investors are willing to pay for it. For private companies or illiquid assets, "fair market value" is generally derived from comparable companies or assets that have recently had a transaction associated with them.
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