Business Valuations – Why You Can’t Trust the “Expert”

By Dave Oswald

Let’s be honest. Business valuations aren’t science. They’re storytelling with spreadsheets.

In our experience, we have never seen a valuation prepared for court that favors the other side. Not once.

Same Business. Two Stories. Two Values.

Take a restaurant:

With the owner gone? Worth $30K on a fire sale.
As a going concern? Worth $2M using cash flow multiples.

Same place. Same assets. Just different assumptions.

Now try the same with:

An accounting firm:

One partner exiting? 1× net income.
Strategic acquisition? 3× EBITDA.

A tech startup:

Divorce case? “Speculative, unprofitable” = $700K
VC pitch? “Scalable, disruptive” = $10M

Why the difference?
Because most valuations are contextual, not objective.

Even so-called “neutral experts” often subconsciously favour the party who retained them. The method chosen, risk factors, growth assumptions, they’re all negotiable.

What clients & lawyers should ask:

Why is this valuation being done?
What assumptions were made and who do they benefit?
Is the method appropriate for the business model?
Should you get a second opinion?

Bottom line: A valuation is just one version of the truth.If you don’t ask the right questions, you’re letting someone else control the narrative and possibly the outcome.

Have you ever seen two opposing experts agree on a business valuation in court? Neither have we.

Let’s hear your stories below.