What Is Private Company Valuation? Methods, Examples and Rules

Most published valuations come from a funding round. Investors agree to buy new shares at a price. That price is multiplied by every share the company has issued or promised, including options. The result is the post-money valuation. Subtract the new money and you get the pre-money valuation, what the company was worth just before the round.

• Anthropic, Series H, May 2026$65B raised at a $965B post-money valuation → $900B pre-money, by subtraction.
• OpenAI, March 2026Valued at $852B after completing a $122B round, Bloomberg reported.
• Stripe, February 2026Valued at $159B after a tender offer, in which approved investors bought existing shares.

A round price reflects one negotiation for one class of stock. New investors usually buy preferred stock, which is paid first if the company is sold. So the round price overstates what common stock is worth. Between rounds, the number is not updated by a market. It ages until the next round, tender or appraisal.

Valuers group their methods into three approaches: what similar businesses sell for, what the company will earn and what it owns. For startups, recent deals in the company’s own stock usually carry the most weight. The table compares the main methods.

Valuation Methods for Private Company Shares

A company value still has to be split among the share classes. Preferred holders are paid first, up to their liquidation preference. So each class gets its own price. Appraisers use an option pricing model, often calibrated to the last round (the OPM backsolve), or weigh exit scenarios by probability (PWERM). They then apply a discount for lack of marketability, because a private share cannot be sold quickly.

For US tax purposes, the common stock price behind employee options comes from a 409A valuation. The rule lists the factors a reasonable method weighs: the company’s assets, its expected future cash flows, the value of similar companies, recent arm’s-length deals in its stock and discounts for lack of marketability.

Private equity and venture funds report each holding at an estimate of fair value, usually every quarter. They use the same methods. A buyout fund leans on multiples of profit and cash flow. A venture fund usually starts from the last round and adjusts for later news. The sum is the fund’s net asset value (NAV), which feeds into measures such as TVPI and RVPI.

NAV is the manager’s estimate. When investors sell fund stakes on the secondary market, buyers often pay less. In the first half of 2026, LP portfolios sold at 87% of NAV on average, Jefferies reports. Venture fund stakes sold at 79%.

There is no ticker to look up. Here is where the numbers come from, from most to least direct:

1. 01
   Company announcementsMany companies publish the round size and post-money valuation, as Anthropic did for its Series H.
2. 02
   Press reportsFinancial media report valuations from people familiar with a deal. Treat these as estimates until the company confirms them.
3. 03
   SEC filingsA Form D notice on EDGAR shows how much a company is raising and has sold. It does not state a valuation.
4. 04
   Tender offers and secondary tradesA tender price is a recent price for existing shares. Private-market platforms also show bids and trades in some companies.
5. 05
   Your own documentsEmployees see the 409A value in option grants. Fund investors see their holding’s value in quarterly reports.

Each source answers a different question. A round price is for preferred stock. A 409A value is for common stock on a tax date. A secondary bid is what one buyer will pay today. Note the date and the share class of every number you find.

A private company has no single stock price. On any day, it can have a round price for preferred stock, a 409A value for common, a tender price and private bids. The gaps between them are normal. They reflect the rights of each class, the wait before a sale and who is buying. The pre-IPO shares page shows how these prices line up for a holder.

For tax, the IRS works from fair market value: the price at which property would change hands between a willing buyer and a willing seller. Neither may be under pressure to deal, and both must know the relevant facts. A forced sale or a sale to a friend does not meet that test.

A company sells Series C preferred stock at $20 a share and raises $100M. It has 50M shares on a fully diluted basis, which counts options and convertible securities. Revenue last year was $80M. Here is how the methods compare.

The company value ranges from $700M to $1.0B depending on the method. The share price ranges from $7 to $20 depending on the class and the buyer. If you hold common stock, the $20 headline is the least useful number on the page.

• Using the headline for your sharesThe post-money valuation uses the preferred price. Your common shares are usually worth less.
• Ignoring the dateA valuation is a snapshot. A round from two years ago says little about today.
• Mixing pre-money and post-moneyPost-money includes the new cash. Confusing the two misstates the price per share.
• Treating NAV as a sale priceFund stakes often sell below NAV. Venture stakes averaged 79% of NAV in the first half of 2026.
• Reading a press figure as factUnconfirmed reports can be wrong or describe a round on unusual terms. Check the source.

• Share classesWhy preferred and common stock carry different prices: common stock vs preferred stock.
• The shares themselvesHow shares in a private company are issued and sold: private company stock.
• Valuation growthHow a higher multiple, with no change in the business, lifts a valuation: multiple expansion.
• Fund metricsHow NAV turns into a fund’s reported multiple: MOIC and TVPI.

Private company valuation

An estimate of what a company whose shares do not trade on an exchange is worth.

Post-money valuation

The company’s value right after a round: the round price times all shares, including the new ones.

Pre-money valuation

The company’s value just before a round: post-money minus the new money raised.

Fully diluted shares

All shares outstanding plus every option and convertible security as if turned into shares.

Fair value

The estimate of what a holding would sell for, which funds use to report their investments.

Net asset value (NAV)

The total estimated value of a fund’s holdings, minus its debts.

409A valuation

An independent appraisal of a private company’s common stock, used to set option strike prices.

DLOM

A discount for lack of marketability: the price cut for a share that cannot be sold quickly.

Figures were last checked on October 21, 2026. Tax rules are cited for the United States. Company valuations are as reported on the dates shown and change.