When discussing the Estimate of Value that is provided by The Value Builder System™, it's important to note that it is an estimate and every business is unique. The ultimate value of a privately held business can only be obtained by letting the market set the price in a comprehensive selling process.
That said, we rely on DealStats (formerly Pratt's Stats) as the raw material that drives our valuation algorithm. DealStats provides a range of values for a specific industry and we then use the respondent's Value Builder Score, combined with our own proprietary algorithm, to provide an estimate of where the respondent is most likely to fall within a range.
DealStats is published by Business Valuation Resources LLC and is considered the most comprehensive database of completed transactions available in the market. Here's how DealStats describes it's approach:
DealStats (formerly Pratt's Stats) is a state-of-the-art platform that boasts the most complete financials on acquired companies in both the private and public sectors.
Every transaction in DealStats is rigorously reviewed by BVR’s dedicated team of financial analysts in real time. Whether you are valuing a business, deriving a sale price, benchmarking performance or conducting fairness opinion research, you won’t find more complete and trustworthy comparable data in any other source.
The Estimate of Value should never be used for financing or litigation (e.g. partner disputes, divorce). If you require an Estimate of Value for litigation support, we recommend you hire a Certified Valuation Analyst (CVA) which you can find from the National Association of Certified Valuators and Analysts (https://www.nacva.com/). Depending on the complexity of the case, and purpose of the valuation, a CVA will typically charge $10,000 - $30,000 for a valuation to be used for litigation purposes.