CARRIED INTEREST VALUATION

For General Partners of Venture Capital and Private Equity Firms
Obtain an independent, supportable valuation of carried interest
When transferring carried interest as part of a gift and estate tax planning strategy it is best to work with professionals who understand the venture capital model and its unique risk profile. Working with an expert is is critical, especially if the value of the carried interest is later challenged by the IRS. That’s were we come in.

We typically use two approaches for the valuation of carried interest, a discounted cash flow method and an option pricing method. Below is a summary of the inputs needed under each approach.

Option Pricing Method

  • Asset Price
  • Strike Price
  • Time to Maturity
  • Risk-Free Rate
  • Price Volatility

Discounted Cash Flow

  • Fund Performance
  • Pace of Investment & Capital Calls
  • Distribution Waterfall
  • Risk-Free Rate
  • Discount Rate

Get a Consultation on Your Valuation

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