Question of the day
2026-11-04
Valuation
Explain the 'levels of value' framework: control value, marketable minority, and non-marketable minority.
Answer it out loud first — like you would in the room. Then check yourself:
Reveal the model answer
Model answer
Valuation practitioners distinguish three levels
- control value - what a buyer pays for the whole company (precedent transactions live here)
- marketable minority - freely tradable, non-controlling public shares (trading comps live here)
- non-marketable minority - a minority stake in a private company, the lowest level. Premiums and discounts move you between levels: a control premium takes you from marketable minority up to control; a DLOM takes you from marketable minority down to non-marketable. The discipline is knowing which level your starting method produces so you apply only the adjustments needed to reach the level you're valuing - stacking a control premium on precedent multiples, or a DLOM on an already-illiquid benchmark, double-counts.
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