9 Top Third Party Valuation Firms for Accurate Business Valuations

9 Top Third Party Valuation Firms for Accurate Business Valuations

You know your business is worth something, but determining an accurate valuation requires expertise and objectivity. As a business owner, you’re simply too close to the company to assess its true value. What you need is an independent, third-party valuation firm with experience valuing businesses in your industry. They can provide an objective analysis of your firm’s financials, intellectual property, assets, growth potential, and other factors to determine a fair market value.

The top third party valuation firms, as ranked here, have the credentials, expertise, and methodologies to provide precise and defensible valuations that will withstand scrutiny. Whether for strategic planning, litigation support, mergers and acquisitions, or estate and gift tax planning, these leading firms will give you the impartial business valuation you need. Read on to find the firm best suited for your needs.

What are Third Party Valuation Firms?

Third party valuation firms are an independent companies or firms that provides objective business valuations. They are not affiliated with either the buyer or seller, so they can provide an unbiased estimate of a company’s fair market value.

Third party valuators are experts in business finance and accounting. They employ proven methods like discounted cash flow analysis, comparable company analysis, and comparable transaction analysis to determine a reasonable valuation range for a business.

Why Use Third Party Valuation Firms?

There are several benefits to using third party valuation firms:

  • Objectivity. Since they have no vested interest in the transaction, third party valuators can offer provide an impartial valuation. This helps avoid overpaying or underselling.
  • Expertise. Third party valuation firms have extensive experience valuing businesses in a wide range of industries. They are up to date with the latest valuation methods and standards.
  • Defensibility. If the valuation is ever scrutinized, a third party report can stand up to challenges. Their objectivity and expertise lend credibility.
  • Efficiency. Third party valuation firms have streamlined processes for analyzing financial statements, researching comparable companies, and calculating valuations. They can provide an accurate report in a timely manner.

Why You Need an Independent Valuation

As a business owner, obtaining an objective valuation of your company from an independent third-party firm is crucial. An independent valuation can provide an unbiased assessment of the fair market value of your business based on standard valuation methods and metrics. This allows you to make data-driven decisions regarding strategic initiatives, partnerships, investments or exiting your business.

Relying solely on your own internal valuations or gut instincts is risky and can lead to flawed judgments. Our intuition is often biased and overconfident. Independent third party valuation firms have the expertise and objectivity to value your business accurately based on relevant metrics and methodologies. They can determine the fair market value by analyzing your financials, growth, industry trends, competitive landscape and other value drivers.

Using third party valuation firms for an independent valuation is essential for several reasons:

  • Seeking outside investment or partnerships. Investors and partners will conduct their own due diligence to determine a valuation and you need an objective figure to negotiate from.
  • Business succession planning. Obtaining an independent valuation of your business is key to establishing a fair price for transferring ownership or shares to family members or employees.
  • Preparing to sell your business. An objective valuation is necessary to determine an asking price, evaluate offers and successfully negotiate a deal. Buyers will scrutinize the valuation to determine if it’s realistic.
  • Gaining an objective assessment of your business. Regular valuations provide an opportunity for an independent expert to review your financials, key performance indicators and intangible assets to determine areas of strength or opportunities for improvement. Their insight can help guide business strategy.
  • Tax reporting requirements. Certain transactions like gifting shares or establishing an ESOP may require a professional valuation for tax and compliance purposes.

The bottom line is that independent, expert valuations provide objectivity and help minimize risks in key business decisions and transactions. While it requires an upfront investment, a valuation from a reputable firm can give you peace of mind and help maximize opportunities. Your business and future are worth it.

Top Factors to Consider When Choosing Among Third Party Valuation Firms

When choosing a valuation firm to determine the worth of your business, several factors should weigh heavily on your decision-making process. Some key things to consider:

Experience and Expertise

Look for a firm with extensive experience conducting business valuations, especially in your industry and for companies of a similar size. Valuing a small e-commerce retailer is quite different than valuing a mid-size biotech startup. Choose a firm with the proper expertise and credentials to value your specific business accurately.

Independent and Unbiased

Seek out an independent third-party firm with no incentive to provide an unjustified valuation. They should have no interest in buying or investing in your company. Their goal should be providing an objective, unbiased valuation based solely on your business’s attributes and metrics.

Credentials and Methodology

Choose a firm whose valuators hold proper credentials like the Accredited Senior Appraiser (ASA) designation. Review their valuation methodology to ensure it aligns with industry standards like the Uniform Standards of Professional Appraisal Practice (USPAP). They should take a multi-faceted approach considering both qualitative and quantitative factors to determine your business’s fair market value.

Reporting and Defensibility

Look for a firm that provides a detailed valuation report outlining all the factors, assumptions, and methodologies used to arrive at their conclusion. The report should be comprehensive enough to defend the valuation if challenged. It should touch on your business’s financials, market conditions, competition, growth prospects, and other elements impacting value.

Cost and Timing

Fees and turnaround time are also important considerations. Valuation costs can vary significantly based on the size and complexity of your business. Make sure you understand all potential fees upfront before engaging a firm. Also consider their availability and timing to ensure they can complete the valuation within your required timeframe.

Choosing the right valuation firm is a big decision. Do your due diligence, check references, and make an informed choice based on experience, expertise, objectivity, methodology, reporting, cost, and timing. The firm you select could make a difference of millions of dollars in your final business valuation.

9 Top Third Party Valuation Firms of 2024 (in alphabetical order)

When looking to obtain an accurate valuation of your business, consider hiring reputable third-party valuation firms. These firms employ credentialed experts with extensive experience determining fair market value for companies across industries. They utilize proven methodologies and have access to current market data to provide an objective analysis.

Deloitte – Valuation and Modeling

Deloitte is a highly reputable global professional services firm, providing industry-leading expertise in business valuation and analytics. Their valuations professionals offer deep experience across sectors, geographies, and asset classes to provide insights into value creation and help clients make better decisions.

Extensive Experience

With over 700 dedicated valuation professionals around the world, Deloitte can value businesses of any size or type. They have performed over 50,000 valuations for tax, financial reporting, transactions, and strategic purposes. Their valuators stay up to date with the latest standards and methodologies to provide opinions that will stand up to scrutiny.

Multidisciplinary Approach

Deloitte takes an integrated approach to business valuation, combining financial, tax, audit, consulting, and industry experience. They consider both quantitative and qualitative factors to gain a holistic view of a company and provide an accurate assessment of value. Their valuations benefit from synergies across service lines, bringing broader business insights to each engagement.

Focus on Value Creation

Deloitte’s valuations aim to provide strategic insights, not just numbers. They evaluate factors like competitive position, customer base, intellectual property and key business partnerships to understand what drives value in an organization. Their reports outline opportunities to enhance value through improved performance, risk management, capital structure optimization and other means.

Global Capabilities

As a globally connected firm, Deloitte can assign the right resources for cross-border or multi-jurisdictional valuations. They have valuation leaders in over 40 countries, with global collaboration enabling valuations of businesses with international operations or ownership. Cultural and market expertise is essential for valuations with an international scope.

From middle-market private companies to multinational public enterprises, Deloitte has the experience and capabilities to provide accurate and defensible business valuations for organizations of any size or industry. Their integrated, strategic approach helps executives gain useful insights to support key business decisions and long-term success.

Eton Venture Services

When looking for a robust, accurate business valuation, Eton Venture Services should be at the top of your list. Eton is perhaps the most focused firm on this list as the only services they offer are valuation services. Eton is well known for combining the expertise of leading third party valuation firms to offer comprehensive and reliable business valuation services focused on small to mid-market businesses at reasonable price points.

Valuation Expertise

Utilizing industry-standard valuation methodologies and a collaborative engagement process, Eton delivers well-supported valuation conclusions and fairness opinions. Their approach includes sophisticated modeling, detailed financial analysis, industry research, and robust valuation models, ensuring compliance with relevant tax and accounting standards.

Eton employs commonly accepted valuation methods such as the income approach, the market approach, and the asset approach. They meticulously examine historical and projected financial information, management forecasts, comparable public companies, precedent transactions, and industry trends to establish a well-supported valuation range and estimate of value. With expertise in valuing early-stage companies, derivatives, structured products, and illiquid investments, they apply multiple methods to triangulate an accurate valuation range.

Eton’s team of credentialed, Big 4-trained, business valuation experts, including Certified Valuation Analysts (CVAs), Accredited Senior Appraisers (ASAs), Certified Public Accountants (CPAs), and Juris Doctors (JDs) have the expertise to assess the fair market value of businesses of all stages and sizes. Eton’s professionals deliver credible and independent valuations that withstand scrutiny from auditors, tax authorities, boards of directors, courts of law, and other types of adversaries.

Given that Eton’s founders are attorneys, Eton is quite accustomed to working with attorneys to determine fair compensation in shareholder disputes or partnership dissolutions and other complex litigation requiring business valuation expertise.

Superior Client Service

Eton is renowned for their white glove client service. They take the time to understand your business inside and out so they can provide the most precise valuation. Eton’s leadership heads up each engagement and will guide you through the entire process, fielding any questions you may have along the way.

Quick Turnaround

Unlike some of the larger firms, Eton can provide valuations very quickly, often within 5 to 10 days. They recognize that timing is crucial for many clients, whether you need a valuation for an M&A transaction, litigation, tax compliance, or financial reporting. Their streamlined process and laser focus on small to mid-market private companies allows them to turn around reports faster than most without sacrificing rigor.

Reasonable Pricing

Considering the high quality of their work and service, Eton Venture Services is very reasonably priced. Fees start between $5,000 and $15,000 for smaller businesses under $5 million in revenue. While not the cheapest option, they provide far more value than lower-cost alternatives. For an event as significant as selling your business or raising capital, an independent, rigorous, defensible valuation is well worth the investment.

Why Choose Eton?

In addition to their expertise, experience, and reasonable pricing, Eton Venture Services also prides themselves on their impeccable ethics and integrity. Eton was founded by, and is led by, former corporate securities M&A attorneys. This unique perspective enables Eton’s team to understand the sensitive nature of business valuations and take great care to protect client confidentiality and objectively disclose any potential conflicts of interest.

Eton’s team of valuation experts will work transparently with you throughout the entire process. They will clearly outline their methodology upfront and provide full documentation to support their final valuation that will include a signed certification under the Uniform Standards of Professional Appraisal Practice. This allows clients to have confidence in the rigor, defensibility, and credibility of Eton’s reports.

For all these reasons, Eton Venture Services stands out as a premier choice for companies seeking a reputable yet cost-effective third party business valuations. If you need an accurate valuation to support an important business decision, Eton’s combination of expertise, service, speed, and integrity make them a valuation firm you can trust. Reach out to Eton for business valuation.

Houlihan Lokey

Houlihan Lokey is a leading global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and valuation. They are well known for their Portfolio Valuation and Fund Advisory Services, advising major asset managers with a focus on private companies, structured product, and derivative valuations.

Among established third party valuation firms, Houlihan Lokey provides independent valuation opinions and fairness opinions for companies across various industries. Their team includes over 400 valuation professionals worldwide in 20 offices who focus specifically on valuation.

Valuation Expertise

Houlihan Lokey’s valuation professionals have significant experience valuing businesses, securities, intangible assets, and financial instruments across all major industries for transactions, tax, financial reporting, and strategic purposes. They provide valuations of:

  • Private companies
  • Public companies
  • Portfolio companies
  • Intangible assets
  • Derivatives and structured products
  • Hard-to-value securities

Houlihan Lokey utilizes industry-standard valuation methodologies and a collaborative engagement process to deliver well-supported valuation conclusions. They have valued tens of thousands of companies and have significant experience with complex valuation issues.

Credentials and Recognition

Houlihan Lokey is a publicly traded company (NYSE:HLI) and is regulated by the SEC. Their valuation professionals hold leading professional credentials, including the Chartered Financial Analyst (CFA) and Accredited Senior Appraiser (ASA) designations.

Houlihan Lokey is consistently ranked as one of the top valuation and fairness opinion providers globally. They have received numerous industry accolades, underscoring their leadership in valuation and the strength and depth of their global team. With their dedicated focus on valuation, substantial experience, professional credentials, and global capabilities, Houlihan Lokey is well positioned to provide clients with accurate and credible third-party valuation and strategic advisory services.

KPMG – Valuation

KPMG is one of the largest professional services firms in the world and a global leader for business valuation and corporate finance advisory services. With over 700 valuation professionals across their global network, KPMG has extensive experience performing valuations for financial reporting, tax planning, mergers and acquisitions, restructurings, and dispute and litigation purposes.

Advanced Valuation Techniques

KPMG utilizes sophisticated modeling and valuation methods for complex instruments and business interests. Their valuations incorporate detailed financial analysis, industry research, and proprietary valuation models. For financial reporting valuations, KPMG follows the guidance set forth by the relevant accounting standards. They are skilled at valuing early-stage companies, intangible assets, derivatives, structured products, and illiquid investments.

Industry Specialization

KPMG has in-depth expertise in a wide range of industries, including technology, life sciences, real estate, mining, and financial services. Their valuators understand the unique drivers of value within each sector and leverage specialized tools and methodologies tailored to each industry.

Experience and Credentials

KPMG’s valuation professionals are highly experienced and include chartered financial analysts (CFAs), certified public accountants (CPAs), and accredited in business valuation (ABV) designees. They provide credible and independent valuations that withstand scrutiny from auditors, tax authorities, boards of directors, and courts of law.

Global Capabilities

As a global network, KPMG can perform valuations and coordinate tax structuring for multi-national corporations. They have an established presence in 147 countries with more than 227,000 professionals worldwide. KPMG can leverage global resources and coordinate across borders to provide clients with valuations and advisory services for their businesses on a worldwide scale.

KPMG is a leading provider of valuation and corporate finance services due to their tenure, industry expertise, highly experienced professionals, and global reach. For accurate and defensible business valuations, KPMG has the skills and capabilities to handle even the most complex assignments.

Kroll – Valuation Services

When it comes to business valuations, accuracy and credibility are paramount. Among leading third party valuation firms, Kroll has established a reputation for providing comprehensive and meticulous valuation services for financial reporting, tax, investment, and risk management purposes.

Comprehensive Services

Kroll offers a full suite of valuation services to meet complex financial and tax reporting requirements. Whether you need valuations for financial reporting under ASC 820 (formerly FAS 157), gift and estate tax reporting, mergers and acquisitions, or internal strategic planning, Kroll has you covered. Their team of credentialed valuation professionals adhere to the highest professional standards to ensure valuations withstand scrutiny.

Industry Expertise

With specialists in nearly every major industry, Kroll’s valuation experts understand the unique drivers of value for your business. They know how to properly account for industry-specific metrics, growth curves, risk profiles, and market forces. This depth of expertise inspires confidence in their conclusions and helps avoid missed opportunities or compliance issues.

A Trusted Partner

For 40+ years, Kroll has provided independent valuation and advisory services to public and private companies of all sizes. They are a trusted partner to leading professional services firms, providing valuation opinions that stand up to scrutiny. With Kroll, you get the accuracy and credibility of top-tier third-party valuation firms with personalized service and direct access to senior leadership. For your most complex or sensitive valuation needs, Kroll is a solid choice.

PwC – Valuation and Business Modeling

When looking for a reputable firm to conduct a business valuation, consider PwC (PricewaterhouseCoopers). As one of the “Big Four” accounting firms, PwC is well known for providing comprehensive business valuation services using proven methods and the latest technology.

Experience and Expertise

PwC has been performing business valuations and corporate finance services for over 40 years. They have a global team of accredited valuation specialists and certified public accountants with extensive experience across industries. PwC can assess the strategic value of your business for mergers and acquisitions, tax reporting, estate and gift tax planning, financial reporting, and litigation support.

Comprehensive Valuation Approaches

PwC utilizes commonly accepted valuation approaches like the income approach (discounted cash flow method), the market approach (guideline public company method), and the asset approach (adjusted net asset value method). They examine historical and projected financial information, management forecasts, comparable public companies, precedent transactions, and industry trends to determine a well-supported valuation range and estimate of value.

Additional Value-Added Services

In addition to standalone valuations, PwC provides value-added services that can enhance a business valuation. These include:

  • Financial due diligence – Analyzing historical financials, quality of earnings, working capital, and debt levels.
  • Tax valuations – Determining the value of assets for estate and gift tax compliance or planning.
  • Purchase price allocations – Allocating the total purchase price of an acquired business among tangible and intangible assets.
  • Impairment testing – Assessing if the carrying value of goodwill and other intangible assets are impaired.
  • Fairness opinions – Evaluating if the consideration in a transaction is “fair” for shareholders from a financial point of view.

For an accurate business valuation from a reputable firm with global reach, consider PwC and their team of experienced valuation professionals. They utilize proven methodologies and value-added services to provide insightful analysis and valuations for your business.

Stout Risius Ross

When looking for an accurate business valuation, Stout Risius Ross should be at the top of your list. As one of the most well-known third party valuation firms, Stout utilizes a systematic approach to determine a company’s true value.

Financial Analysis

Stout analyzes a company’s financial statements, including income statements, balance sheets, and cash flow statements going back several years. By scrutinizing revenues, profits, assets, liabilities, and cash flows, Stout can identify historical growth trends and future potential. They determine how sustainable the company’s competitive advantage might be by assessing financial metrics like profit margins, revenue growth, and return on invested capital.

Industry Assessment

To determine how a company stacks up against competitors and overall industry trends, Stout evaluates the industry’s growth potential and competitive dynamics. They consider how susceptible the industry is to disruption, trends in consumer preferences, and risks from new regulations or technologies. Stout determines if the company is poised to gain or lose market share based on factors like brand strength, product innovation, and operational efficiency.

Valuation Methodologies

Stout utilizes commonly accepted valuation methods, including discounted cash flow analysis, comparable company analysis, precedent transaction analysis and asset-based approaches. By applying multiple methods, Stout can triangulate on an accurate valuation range. They determine appropriate discount rates and growth rates based on the company’s historical performance, current industry trends, and overall economic outlook.

Stout’s valuations provide an objective, well-supported determination of what a business is truly worth. For mergers, acquisitions, litigation, or financial reporting, Stout’s valuations give stakeholders confidence that they have an accurate assessment of the company’s fair market value. With over 25 years of experience, Stout is a leader in delivering independent valuations and financial advisory services.

Valuation Research Corporation

Valuation Research Corporation (VRC) is a leading independent business valuation and financial advisory firm. They are well known for providing objective business valuation and strategic assessment services for transactions, financial reporting, and tax compliance.

Credibility and Experience

With nearly 50 years of experience, VRC has valued thousands of private and public companies across almost every industry. They employ over 1500 valuation professional, leveraging their expertise for each unique engagement.

Services Offered

VRC’s services include financial opinions with respect to valuation, solvency, capital adequacy and fairness in connection with mergers, acquisitions, divestitures, leveraged buyouts, recapitalizations, financings and financial and tax reporting matters. The in-house valuation capabilities include businesses, equity and debt securities, loans, derivative instruments, structured products, intangible assets, fixed assets and real estate.

Why Choose VRC?

VRC is a reputable, unbiased firm that provides well-supported valuation opinions and advisory services. They take a customized approach for each client, considering both quantitative and qualitative factors to determine a credible valuation. With professionals worldwide, they offer both local market knowledge and broad expertise. For business owners and executives looking for an independent valuation specialist, VRC is a solid choice.

Conclusion

You’ve read about some of the industry leaders in business valuation. As an entrepreneur, partner, or stakeholder, you understand the importance of an objective valuation of your business. After all, your business is likely one of your most valuable assets. The firms profiled here are trusted for their expertise, experience, and adherence to professional standards. They can help determine an accurate valuation for tax, financial reporting, mergers and acquisitions, litigation support, and various other purposes. While valuation is part science and part art, these firms have the knowledge and skills to apply proven methodologies tailored to your specific situation. For peace of mind and confidence in one of your business’s most consequential metrics, consider partnering with one of these top third-party valuation firms. An investment in an independent valuation could provide returns for years to come.

Third Party Valuation Firms FAQs

As an owner of a small or mid-sized business, you may have questions about third-party valuation firms and how they can help determine an accurate valuation of your company. Here are some commonly asked questions and answers:

What are third party valuation firms?

Third party valuation firms are independent companies that provide unbiased business valuations and appraisals. They employ certified valuation analysts and appraisers who have extensive training and experience determining the fair market value of businesses, assets, and intellectual property.

When is it necessary to hire a third party valuation firm?

You may want to hire third party valuation firms when selling your business, acquiring another company, settling a legal dispute, obtaining financing, restructuring ownership, or for tax and accounting purposes. Their valuations provide an objective and supportable determination of value that can stand up to scrutiny.

How do third party valuation firms determine the value of a business or asset?

Third party valuation firms use proven methods like the income, market, and asset approaches. The income approach considers the business’s cash flows and earnings. The market approach compares the business to recent sales of similar companies. The asset approach sums the values of the tangible and intangible assets. Valuators analyze the business’s financials, industry, competition, growth prospects, and risks to determine a well-supported valuation range.

What are the benefits of using third party valuation firms?

The key benefits of hiring an independent valuation firm include:

  • Objectivity: They have no incentive to over or undervalue the business.
  • Expertise: Valuation professionals have extensive training and experience.
  • Defensibility: Their valuations can withstand challenges from tax authorities, courts, and buyers.
  • Efficiency: They can save you time and ensure an accurate result.
  • Negotiating power: Their valuation may put you in a better position when negotiating a sale or acquisition.

Using reputable third party valuation firms is the smart choice for obtaining an objective, well-supported determination of your business’s fair market value. Their expertise and experience can give you confidence in the accuracy of the final valuation.

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President & CEO

Chris co-founded Eton Venture Services in 2010 to provide mission-critical valuations to venture-based companies. He works closely with each client’s leadership team, board of directors, internal / external counsel, and independent auditor to develop detailed financial models and create accurate, audit-proof valuations.

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