Private company shares lack an active public market, making them harder to sell. The Discount for Lack of Marketability (DLOM) adjusts their valuation for this illiquidity. The restricted stock method compares restricted and freely traded shares of the same company, with studies showing discounts of 20%–35%, sometimes reaching 90%. The option pricing method uses option values to estimate the discount, while the IPO method compares pre- and post-IPO prices, with studies indicating discounts of 40%–60%.

The Mandelbaum factors provide a qualitative framework covering comparable share values, financial health, dividend history, business prospects, management quality, ownership control, transfer restrictions, expected holding period, repurchase policies, and estimated costs of going public. Estimating DLOM can be challenging because private-company asset values are difficult to establish, and tax complications may arise for interests that are both non-marketable and non-controlling. DLOM differs from the Discount for Lack of Control (DLOC), which reflects the absence of decision-making control, and the Discount for Lack of Liquidity (DLOL), which addresses converting assets into cash without significant loss of value. These discounts may overlap but address different aspects of valuation.

Ramp raised $1.85 billion in a funding round valuing the company at $60 billion, four months after raising $750 million at a $44 billion valuation in June. The round was co-led by Dragoneer Investment Group, Thrive Capital, Founders Fund, Sands Capital, and Avenir Growth. Ramp’s annualized revenue has crossed $2 billion, up from $1.5 billion in June, with revenue growth 25% faster than at the same time last year.

The company now facilitates over $275 billion in annualized purchase volume, up 175% year over year, and serves 85,000 customers. Ramp has raised approximately $5 billion in total funding. The company is also expanding its financial operations platform and embedding AI agents across its products.

Source: TechCrunch