Define the exact interest
A 10% shareholding can carry very different rights in different companies. Review voting rights, board appointment rights, reserved matters, dividend rights, liquidation preferences, information rights, transfer restrictions, drag-along and tag-along provisions, and any shareholder or investment agreement.
Control is more than ownership percentage
Control may arise from voting power, contractual rights, dispersed ownership or the ability to direct key decisions. Conversely, a large percentage may still lack practical control where another shareholder or agreement dominates decisions.
Marketability and transfer restrictions
Private shares are not traded on an active exchange. Restrictions, approval requirements, rights of first refusal, limited buyer access, information asymmetry and uncertain exit timing may affect marketability. These factors should be analysed rather than reduced to an automatic standard discount.
Purpose changes the analysis
A transaction between willing parties, a shareholder dispute, an accounting measurement, a statutory process and an internal planning exercise may use different bases of value or assumptions. Some contexts may require pro-rata value, while others may consider control or marketability. The applicable instruction should be confirmed with legal or accounting advisers where necessary.
Evidence and methods
Relevant evidence may include actual transactions in the company’s shares, funding rounds, offers, shareholder agreements, comparable listed-company data, restricted-stock evidence and option-pricing or other quantitative studies. No single source is decisive in every case.
Avoid mechanical percentages
Applying a generic minority or marketability discount without analysing the actual rights and facts can be misleading. The report should explain the rationale, evidence, limitations and sensitivity of any adjustment.