How to Value a Private Company in Google Sheets

Valuing a private company is one of the most common challenges in finance. Unlike public companies with liquid stock prices, private companies require you to build models from scratch. Here's how to do it efficiently.

Method 1: Discounted Cash Flow (DCF)

The DCF method projects a company's free cash flows and discounts them back to present value using the Weighted Average Cost of Capital (WACC).

Step 1: Project Revenue

Start with the company's current revenue and apply a growth rate. For a $10M revenue company growing at 15%, you'd project:

Year 1: $10.0M
Year 2: $11.5M
Year 3: $13.2M

Step 2: Calculate EBITDA

Apply an EBITDA margin (typically 15-30% for most businesses). At 20% margin:

Year 1 EBITDA = $10M × 20% = $2.0M

Step 3: Derive Free Cash Flow

UFCF = EBITDA - Taxes + D&A - CapEx - ΔWorking Capital

Step 4: Terminal Value

Terminal Value = UFCF_Year5 × (1+g) / (WACC - g)

Method 2: Comparable Company Analysis

Find 5-10 public companies similar to your target. Calculate their EV/Revenue and EV/EBITDA multiples. Apply the median multiple to your target's financials.

Method 3: Precedent Transactions

Look at similar M&A deals. The median EV/EBITDA multiple paid in comparable transactions gives you a valuation range. Add 20-30% control premium.

Build This in Google Sheets

I created a Private Company Valuation Toolkit that includes all three methods with pre-installed formulas, sample data, and step-by-step instructions. It saves about 10 hours of model-building time.

The toolkit includes: