Top Third-Party Valuation Companies

Estimates indicate that the Business Valuation Platform Market, worth $60 billion in 2023, will reach a whopping $97.49 billion by 2031, expanding at a remarkable CAGR of 7.18 percent from 2024 to 2031. Modern business practices rely increasingly on accurate and competent valuation services.

However, not all valuations are the same. You may need a business valuation to evaluate the company’s health, an IP valuation to value patents, trademarks, or copyrights, or a real estate or equipment valuation to determine the fair market value of your physical assets.

Specific expertise is necessary for each type. For such, you might turn to top valuation firms. Find a reputable third-party valuation company with a track record of effectiveness in your sector. It is crucial to consider the valuation team’s credentials, expertise, and professional standards.

This article aims to give a comprehensive idea of 

• How to choose the right valuation company?
• The benefits of having valuation company for independent appraisals
• A list of top third-party valuation companies.

Let’s begin by understanding the factors you must consider when choosing the top valuation firms.

Business Valuation Market at a Glance

The business valuation platform marketplace is witnessing a significant surge in demand due to various factors, such as accurate agency valuation, an increase in merger and acquisition activity, and the adoption of modern solutions by the financial and funding sectors.

The market for business valuation platforms will reach a significant size by 2031 and increase at a phenomenal growth rate (CAGR) over the projected period.

Based on type – the worldwide business valuation market can be divided into cloud-based and on-premises segments.

• Cloud-based: For modern companies operating in a digital world, cloud-based business valuation structures offer adaptability, scalability, and remote access.
• On-Premises: For companies with stringent compliance requirements or sensitive data, the optimal enterprise valuation structure is an on-premises solution offering better oversight and control over data.

Based on the applications – the worldwide market can be divided into startups, medium-sized, and large enterprises.

• Startups: To sustain their initial growth levels and attract possible investors, startups always seek cost-effective and user-friendly business valuation models.
• Medium-sized Enterprises: As their operations and financial needs change, medium-sized firms need business valuation systems that adapt to their needs.
• Large Enterprises: To effectively manage complicated valuation strategies and transactions, big businesses require sophisticated, all-inclusive commercial business valuation systems with exceptional capabilities, integration skills, and significant assistance.

Insights:

• The growth of the global business valuation platform market is significantly driven by increased mergers and acquisitions across industries, which fuels the demand for accurate valuations to determine fair market prices.
• The adoption of cloud computing and real-time insights is another key driver, as businesses need immediate data to make informed strategic decisions, quickly adapt to market shifts, and enhance financial performance.

Rapid technological advancements such as artificial intelligence, system learning, and huge data analytics enable business valuation platforms to offer more accurate and complex valuation tools and techniques. Due to their increasing popularity,  third-party valuation firms have become indispensable for business owners. However, such decisions must be carefully made, considering several factors to position themselves in the market better with precise value.

Factors to Consider When Choosing a Third-Party Valuation Company

When selecting a third-party valuation company, you are making a serious decision that can impact your business’s financial and strategic outcomes. Here are some crucial things to think about.

• Credentials and Experience – You should hire a company whose evaluators have certification and years of expertise. For example, certificates like Chartered Financial Analyst (CFA) or Accredited Senior Appraiser (ASA) indicate high skill.
• Industry specialization – The firm must have experience in your particular field. Experts in your field will know the ins and outs of your industry’s market, the best ways to value your business, and all the little details that add up to a high appraisal.
• Experience with similar businesses – Does the company value businesses comparable to yours in size, development stage, and market position? Their previous expertise with similar organizations enables them to apply relevant figures and benchmarks, resulting in a more dependable valuation.
• Valuation methodology – The firm you select must have expertise in the specific procedures that best meet your company’s unique requirements because different valuation techniques can produce varying outcomes. Reputable businesses will thoroughly explain the selected valuation techniques (such as the market, income, or cost approaches) and how they fit your requirements.
• Client focus and communication – A competent valuation company should be client-focused and technically sound. It must accommodate your demands and deadlines, communicate effectively, and make difficult financial assessments easy to understand.
• Fees and turnaround time – Different companies have different fee structures and projected timelines. Request quotations to compare the fee structures of top valuation firms. Feel free to address the terms of payment as well. Additionally, turnaround time is quite important. Before you commit, be sure you understand when you may expect to receive the valuation report. 
• Reputation and client testimonials – A company’s reputation in the industry can tell a lot about its dependability and service quality. Look for case studies and client testimonials to gain insight into the firm’s performance and satisfaction of past clients.

What certifications should I look for in a third-party valuation firm?

Selecting the right professionals with the relevant certifications ensures a winning outcome. Here’s a breakdown of key certifications to look for in your third-party valuation companies:

• Certified Valuation Analyst (CVA) certification has been exclusively available to CPAs with a proctored exam and a comprehensive case study. 
• Accredited Senior Appraiser (ASA) is an extensive multidisciplinary association with appraisers from various fields, including business, real estate, and art. 
• CFA (Chartered Financial Analyst): The CFA Institute offers the globally recognized Chartered Financial Analyst (CFA) degree in financial analysis and investment management. 
• ABV (Accredited in Business Valuation): The American Institute of Certified Public Accountants (AICPA) offers the ABV credential to CPAs focusing on business valuation.
• CBA (Certified Business Appraiser) and Master Certified Business Appraiser (MCBA): The Institute of Business Appraisers (IBA) offers the CBA and MCBA designations. The CBA is for professionals with significant expertise in business appraisal, while the MCBA is a more advanced certification. 

Benefits of having third-party valuation company

With the help of impartial third-party valuation companies, you may gain access to resources that will enable you to make effective decisions and reach your company objectives. Let’s look at the benefits of having a third party valuation.

• Unbiased and objective valuation – Your own biases can influence your decision-making. Third-party valuation companies ensure impartiality by removing any emotional connection from your valuation and reflecting its fair market value. This objective evaluation is essential for important business decisions.
• Expertise and experience – Third-party valuation companies possess industry experience and specialized expertise that are important for accurately evaluating the value of more complex assets or businesses. Their expertise includes a grasp of current valuation techniques and market trends, guaranteeing a solid and convincing valuation.
• Compliance with regulatory standards – Professional valuation services have mastered the complex regulatory landscape of the financial sector. Their knowledge lowers the possibility of regulatory challenges by ensuring that valuations adhere to national and international standards like Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).
• Enhanced negotiation power – When you accurately evaluate your company’s true value, you can negotiate with assurance. Whether you’re selling your company, attracting investors, or buying assets, this leverage can help you close transactions that will benefit you.
• Improved decision-making – The foundation of well-informed decision-making is a thorough grasp of your company’s worth. A valuation report reveals your company’s strengths and weaknesses, delivering valuable insights to inform strategic planning, investment decisions, and resource allocation.
• Market insights – Valuation experts offer forecasts and market trends in addition to evaluating the present worth of assets. This knowledge can be useful when planning for upcoming investments or divestitures.
• Support for financial reporting – Third-party valuation companies are essential if organizations appropriately report asset values to stakeholders. They maintain the trust of shareholders, investors, and regulatory agencies by ensuring the financial accounts accurately reflect the assets’ worth.
• Cost efficiency – Hiring an outside valuation company has up-front costs but may become more affordable over time. Accurate valuation is important for better financial management to prevent overpayments, underinsurance, or expensive regulatory penalties.

Trends in Valuation Services

Here’s a look at the recent trends top valuation firms are mindful of.

Technological Advancements

Technology is having a big impact on how valuation services will work. AI and ML are improving valuation accuracy and efficiency. These technologies speed up data processing and analysis, which is essential in dynamic markets. For example, AI systems can reduce bias and human error by analyzing large datasets to find trends that impact asset valuations. Blockchain technology is gaining traction with its more tamper-proof transaction records.

Regulatory Changes

Regulations greatly impact valuation services and differ greatly from place to place. Recent changes to the European Banking Authority’s rules on loan origination and monitoring have made conducting more thorough valuation processes in the EU more important. 

Similarly, the US-based Financial Accounting Standards Board (FASB) constantly revises valuation rules, including disclosure specifications and fair value measurement. Top valuation firms must stay updated to ensure compliance and accuracy.

Market Demand

There is a growing need for valuation services capable of precisely estimating non-physical assets due to the rising significance of intangible assets like intellectual property and brand awareness. 

Moreover, Environmental, Social, and Governance (ESG) considerations are becoming more popular in the investing community. Progressive valuation organizations include ESG factors in their processes to provide a more comprehensive picture of a company’s value.

Top third-party valuation companies

Below is a summary of some of the top third-party valuation companies in the market, each with a reputation for offering specialized services and unique strengths:

Eqvista

Eqvista is a great option for high-growth enterprises and startups because of our complex equity management and valuation expertise. Our cutting-edge software platform helps us provide a full range of services, such as stock issuance, 409A valuations, and cap table administration. 

Our approach simplifies complex stock management and valuation operations to ensure industry compliance and accuracy. Our intuitive platform and effective service delivery have served over 20,000 businesses worldwide.

Big 4

The Big 4 firms – Deloitte, E&Y, PwC, and KPMG – all engage in business valuation; however, a significant portion of this work supports their audit practices. The businesses offer legal advice, market research, assurance, tax, strategy, management consulting, and auditing services. 

Each has a broad clientele, including major public sector organizations and Fortune 500 firms, demonstrating its capacity to manage demanding and complex valuation projects. Large companies and international organizations favor them because of their broad industry experience, which includes consumer goods, technology, and finance.

Teknos

Teknos is an expert in intellectual property and technology company appraisals. They provide essential services for startups and venture-backed businesses, such as valuations for IRS 409A and ASC 820 financial reporting. Their emphasis on startups backed by venture capital and developing technology makes them a major force in the valuation of innovative and high-tech assets. 

Their thorough and meticulous valuation analyses align with current accounting, tax, and regulatory standards for various tax-compliance and reporting scenarios, including corporate restructuring, mergers and acquisitions, financing, litigation support, bankruptcy, and strategic planning.

Kroll

Kroll is an internationally recognized, long-standing business that provides a wide range of risk and financial advising services, including valuations. You may rely on their extensive knowledge and years of experience in ESG advising, investigations, compliance, corporate finance, and cyber risk management.

Although Kroll’s longevity and extensive capabilities are commendable, it is important to acknowledge that working with a large organization such as Kroll may seem impersonal and corporate. 

Leverage Eqvista’s Expertise for Your Business Valuation

When looking for third-party valuation companies, it is important to find one with the right combination of experience, qualifications, and credibility to help you reach your goals. These partners can guide you through the complex valuation process and provide reliable reports.

We at Eqvista recognize how important valuations are to your company’s success. Our certified professionals use state-of-the-art data analytics, industry-recognized methodology, and in-depth market expertise to provide thorough and convincing valuations customized to meet your unique requirements. We thoroughly analyze your financial accounts, industry benchmarking, and due diligence to determine your company’s valuation.

Contact Eqvista right now for a free consultation and assistance with the procedure. Our valuation specialists can help.