Hiring a valuation company is not just about landing on a price. It’s about securing a number that can face investors without blinking, hold up in financial reporting, withstand buyer and lender questions during diligence, and be persuasive if it ever meets a courtroom. The right valuation turns uncertainty into a decision tool. The wrong one creates drag, delays, and costly rework.
This guide gives you a clean, MECE (mutually exclusive, collectively exhaustive) roadmap for choosing the right partner the first time. You will see what credentials actually mean, which standards matter, how methods differ, and which questions separate experts from generalists. By the end, you will know how to compare proposals with confidence, spot red flags quickly, and align the scope with your goals and timeline. Read on to turn valuation from a hurdle into an advantage.
Editor’s note: Sources listed at the end of this article.
The Shortlist: Non-Negotiables in a Valuation Company Partner
Before you compare proposals, set a high bar. When choosing a valuation company, look for the signs below and you’ll eliminate most misfits quickly.
Accredited experts (ASA/AM) lead the work
Valuation is a judgment craft built on training and review. In many U.S. programs, the American Society of Appraisers (ASA) requires ~2 years of full-time valuation experience for Accredited Member (AM) and ~5 years for Accredited Senior Appraiser (ASA), plus coursework, peer review, and USPAP continuing education. Ask who signs the report and verify credential status.
Recognized standards are named up front
High-quality reports cite and follow established standards such as AICPA SSVS (VS Section 100), USPAP (especially Standards 9 and 10 for business/intangibles), and, when relevant, IVS for cross-border use. A valuation company should name the governing standard in the engagement letter to signal consistent methods, reviewability, and defensibility.
Independence, scope, and deliverables are explicit
Your valuation company’s engagement letter should specify scope (purpose, standard of value, premise of value), independence and conflicts, data needs, management interviews, draft and final deliverables, and whether the work is a valuation engagement or a narrower calculation engagement under SSVS (VS Section 100). Clarity here prevents surprise gaps later.
7 quick green flags
- ASA/AM-credentialed signatory
- Standards named (SSVS/USPAP/IVS) (name the standard in the engagement letter)
- Written scope and timeline with milestones
- Data-security policy and DPA on request
- Access to reputable transaction databases (e.g., DealStats, Capital IQ)
- Audit/IRS and litigation defense experience
- At least two relevant references
Methods That Matter: How Good Firms Actually Value Businesses
A reliable firm doesn’t “pick a multiple.” It triangulates value using approaches suited to your company’s economics.
The three core approaches (and where they shine)
Income Approach (Discounted Cash Flow, DCF): Best when forecasts are credible and value is driven by future cash flows.
Market Approach (Guideline Public/Transactions): Uses EV/Revenue, EV/EBITDA, or earnings multiples from comparable companies or deals; must adjust for size, growth, and risk.
Asset/Cost Approach: Useful for asset-heavy or early-stage cases where earnings aren’t yet meaningful and replacement cost or net asset value dominates.
Using market multiples responsibly
Multiples are shorthand for risk, growth, and quality. In digital business M&A, profit multiples tend to rise with deal size; micro deals often transact at low single-digit profit multiples, while larger deals clear at higher ranges, reflecting a size premium. That is why a valuation company should never paste a headline multiple without context, adjustments, and sensitivity analysis.
Marketplace education posts (e.g., Flippa) note that some sellers quote monthly profit multiples (for example, 30–45× monthly), which translate to roughly 2.5–3.75× annual profit. A valuation company should treat these as orientation bands, then normalize, size-adjust, and risk-adjust before professional use.
Sector nuance: SaaS and AI
Sector matters. SaaS and AI valuations often show wider dispersion and heightened sensitivity to growth quality, net retention, and gross margin. Recent analyses report venture-round AI revenue multiples in the mid-20s to around 30× EV/Revenue at the median (with top deals far higher), while M&A outcomes typically clear lower because acquirers underwrite integration and execution risk. Your appraiser and the valuation company you hire should explain which market they are anchoring to, venture or M&A, and why.
Approaches, when to use them, and what to look for
| Approach | Best for | Typical inputs | What strong reports show |
| Income (DCF) | Cash-flowing or forecastable businesses | 3–5 year forecast, WACC, terminal value | Sensitivity to growth, margins, and discount rate; reconciliation to other indications |
| Market (Multiples) | Comparable deal or public comps exist | EV/Revenue, EV/EBITDA, control/marketability adjustments | Clear peer selection, size/growth/risk adjustments, reasoned weighting |
| Asset/Cost | Asset-heavy or pre-revenue | Replacement cost, net asset value, IP valuation | Support for intangible-asset assumptions and obsolescence discounts |
Standards, Compliance, and Defensibility
This is where process becomes protection. The right standards make your report “stick” with auditors, boards, investors, and tax authorities, and they signal that your valuation company builds opinions that can be reviewed, reproduced, and defended.
Why USPAP/SSVS/IVS show up in good engagements
USPAP Standards 9 and 10 set requirements for developing and reporting business and intangible asset appraisals; AICPA SSVS governs CPAs performing valuation or calculation engagements; IVS supports cross-border comparability. A valuation company that names the applicable standard in the engagement letter sets clear review expectations and reduces rework by aligning methods, documentation, and reporting from day one.
Financial reporting valuations and ASC 820
If your valuation supports U.S. GAAP reporting, the work should align with ASC 820 fair value guidance and its three-level hierarchy of inputs (Levels 1–3). Expect explicit classification of inputs, disclosure-ready documentation, and workpapers an auditor can reperform without guesswork, including sources, assumptions, and reconciliation across approaches.
Litigation and tax use cases
Courts and tax authorities look for methods tied to recognized standards, a coherent narrative, and reconciliation when approaches diverge. Your valuation company should anticipate cross-examination by showing sensitivity tests, explaining source reliability, and providing reasoned weightings—steps that make reports more defensible and faster to close.
Standards and where they apply
| Standard | Typical use case | Primary users | Why it matters |
| USPAP (Std. 9–10) | Business & intangibles appraisals | Courts, lenders, regulators, boards | Sets development & reporting requirements |
| AICPA SSVS (VS 100) | CPA-led valuation/calculation | External auditors, boards | Defines engagement types and documentation |
| IVS | Cross-border/global stakeholders | International investors | Improves comparability across jurisdictions |
| ASC 820 | GAAP fair value measurement (U.S.) | Auditors, SEC filers (U.S.) | Requires hierarchy disclosure & audit-ready support |
Fit, Fees, and Timeline: What to Ask Before You Sign
The best valuation partner will be transparent about data, milestones, and price. Use the questions below to level-set.
Industry data access and comps quality
Ask which databases and feeds they’ll use for guideline public companies and private transactions. For online businesses, market context is changing fast: multiples differ by model (content, e-commerce, SaaS, apps) and are sensitive to deal size. A firm that tracks these nuances and explains why a comp isn’t comparable is a safer choice.
Timeline and work plan
A defensible valuation typically includes: kickoff and scope confirmation; data request; management interview(s); modeling; draft report; quality review; final. Make sure the proposal names owners for each milestone, response times for Q&A, and a schedule for revisions.
Pricing models explained
- Fixed fee: Clear when the scope is well-defined and the purpose is standard (e.g., 409A, purchase price allocation).
- Hourly: Flexible for complex, evolving scopes (e.g., litigation, damages, rapidly changing forecasts).
- Hybrid: Base fee with caps or bands for iterations or extra analyses.
Tie payment to data room access, draft delivery, and final sign-off so everyone stays aligned.
Security and confidentiality
Expect a data-processing addendum (DPA) on request, encryption in transit/at rest, role-based access, and a retention/destruction policy. Sensitive exports should be redacted; sharing via email should be limited.
10 due diligence questions to ask any valuation firm
- Who signs the report, and what are their ASA/AM credentials?
- Which standard(s) will govern this engagement—SSVS, USPAP, IVS?
- Which approaches do you expect to use and why for my business model?
- What comp sources will you use, and how will you adjust for size and growth?
- How will you reconcile different indications of value?
- What’s your internal quality review process, and who performs it?
- What’s the timeline from kickoff to a defendable final report?
- How will you prepare me for auditor or buyer challenges under ASC 820?
- What’s included in the fee, and what triggers change orders?
- How do you secure my data, and how long do you retain it?
Proof They’re Good: Signals in Past Work
Redacted samples and workpaper depth
Ask for redacted excerpts that show methodology and reconciliation across approaches, plus sensitivity analysis (e.g., discount-rate bands, growth scenarios) and, for reporting valuations, ASC 820 hierarchy classification. Strong firms provide clear, replicable workpapers that reviewers can trace end-to-end.
References and case outcomes
Talk to past clients whose situations resemble yours in terms of industry, deal size, or reporting need. Ask whether auditors accepted the valuation with minimal adjustments, whether buyers or lenders pushed back, and how quickly issues were resolved. In online business sales, expectations for multiples and diligence depth vary by model; you want a team that understands the current landscape and can explain variance versus “average” multiples.
Market Reality Check: Multiples Move, yet Your Process Shouldn’t
Markets ebb and flow, but a disciplined process protects you from chasing noise. A valuation company should anchor the work in methods and evidence that hold up even when headlines shift, then explain what that means for your specific model, size, and risk profile.
Digital and SMB M&A trends
In online business markets, profit multiples often rise with deal size, and model-specific dynamics matter. SaaS can command higher ranges than content or e-commerce when growth, retention, and margins are strong. Instead of lifting a single number from a blog post, a valuation company should size-adjust comparables, normalize earnings, and frame upside, base, and downside scenarios so decisions are driven by analysis, not anecdotes.
AI and high-growth tech
Venture-stage AI rounds have recently shown revenue multiples in the mid-20s to around 30× at the median, typically above control-deal outcomes. The gap reflects different risk allocations, information depth, and integration assumptions. Your appraiser—and the valuation company you choose—should state whether benchmarks come from venture financings or M&A transactions, then adjust, reconcile, and run sensitivities so your final conclusion reflects the right market context.
FAQ
Do I need an ASA-credentialed appraiser?
Yes. An ASA or AM credential signals verified training and experience that a valuation company should bring to your project. AM typically reflects about two years of full-time valuation work. ASA usually reflects about five years with deeper discipline expertise. Always confirm who will sign the report and verify their status.
Which standards should be named in my engagement letter?
Ask the valuation company to name the governing standard in writing. For most U.S. engagements, look for AICPA SSVS (VS Section 100) and USPAP Standards 9 and 10 for business and intangible assets. If cross-border stakeholders are involved, include IVS for global comparability.
How long does a defensible valuation take?
Timeline depends on scope, data quality, and review cycles you agree on with the valuation company. Expect clear milestones such as kickoff, data request, management interviews, modeling, draft, quality review, and final delivery. Set response times on both sides to keep the schedule realistic and the report defensible.
Why do venture AI multiples look higher than M&A deals?
Venture rounds often price optionality and hypergrowth. Strategic buyers price integration and execution risk. A valuation company should state whether benchmarks come from venture financings or M&A transactions, then adjust, reconcile, and run sensitivities so the conclusion reflects the right market context.
Start Your Audit-Ready Valuation Today
Ready for an audit-ready, investor-credible valuation that stands up under scrutiny? Contact Bookman Capital at bookmancapital.io and get a clear, defensible number delivered by credentialed experts who speak auditor, investor, and operator. We will scope your goals, confirm standards, and map milestones before work begins. You will know exactly what we will do, why it matters, and when you will have it.
Speak with a Valuation Company That Stands Behind the Number
Let us move from estimates to evidence. If you need a 409A, M&A fairness view, PPA, or litigation support, we will tailor the engagement to your context and constraints. Bring your questions and your data room; we will bring the method, the standards, and the calm. Start your project with Bookman Capital, a valuation company focused on defensible outcomes, and turn valuation from a hurdle into an advantage.
Sources:
- American Society of Appraisers (ASA) — AM/ASA credential requirements
- The Appraisal Foundation — USPAP (Standards for appraisal incl. business valuation)
- AICPA — Statement on Standards for Valuation Services (SSVS / VS Section 100)
- EY (Big Four) — Financial Reporting Developments: Fair value measurement (ASC 820)
- Aventis Advisors — AI Valuation Multiples (2025)