Investments in Private Companies: What information does a divorcing spouse need in order to evaluate these interests?

Identifying the value of a privately held business or business interest to be divided in divorce is one of the most difficult, time consuming, and expensive tasks involved in separating financial assets.  This is even more the case in 2020 when the impact of Covid-19 may have exposed a business’s vulnerabilities or, conversely, opportunities that were previously unrealized.   A business valuation expert can be extremely helpful in appraising the value of privately held business assets and will rely on important information in order to make the valuation.

Before hiring a business valuation expert, gather together these documents:

  • Signed Subscription/Acquisition Agreement(s) and related offering documents
  • Copies of share certificates
    • How are shares titled?
      • Trust or Family Trust
      • Joint or individual owners
    • What type of shares are they?
      • Shares in a Corporation
      • Interests in a Partnership or LLC
  • Any recent 409a valuations (created for private companies that issue stock options)
  • Year-end reports to determine if a fair value valuation exists
  • Operating agreement, if applicable, or by-laws, and articles of incorporation
  • Stockholder agreements, if applicable
  • Documents related to the last round of any capital raised
  • Capitalization table/Percentage ownership
  • Price paid per share and date of purchase of the shares


A CPA with business experience and/or an Accredited Valuation Analyst (AVA) designation or a qualified business valuation expert with a Certified Valuations Analyst (CVA) designation will help clients evaluate these documents. Since there is no actual purchase or sale, analyst valuations can vary widely due to market conditions and to assumptions commonly used by analysts in their valuation models. Therefore, an analyst’s report may be only the starting point of the negotiation.

There are many options when couples disagree about the value of interests in private investments that are part of the marital estate to be divided. For example: Bob believes he will be awarded the marital estate’s private investments. He will want a low value because then he may be awarded more of the other property assets to be divided. Jane believes the investments are worth more because if she argues for a higher value, Bob won’t get as large a share of the property assets to be divided.

Options for structuring interests to be co-owned post-divorce may include holding the interests in a Partnership owned by both spouses equally. An attorney or business valuation expert can help structure the right solution for unique or complex situations.


Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. This material is for general informational purposes only and is not tailored to the needs of any specific individual.  Any discussion of U.S. tax matters should not be construed as tax-related advice. Please consult your personal tax advisor for more information. © 2020 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.