Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Unlock the True Value of Employee Stock Option Plans #shorts

2 Jul 2024 · 1 min

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A short YouTube clip by Bob Gauvreau explaining that private companies often need a formal business valuation when bringing on employees or when employees (including existing shareholder-employees) exercise share purchase options. He notes such events can trigger an annual valuation requirement and that a chartered business valuator must perform a comprehensive valuation for private (non‑publicly traded) companies.

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One area where a business valuation may be required is if you're looking at bringing on any sort of employees, or if you've got employees who are already existing shareholders but they want to execute some of their share purchase options. In many instances it would be an annual business valuation that would be required to be performed. But a lot of these times there's a triggering event and that's the execution of an employee stock option purchase. This is for private companies that don't are not traded on the stock exchange. To establish the value of a private company requires a charter business valuator and to have a full comprehensive business valuation completed.