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Level 1

Help on Valuing an LLC

So, I have a client who recently started a single-member llc. He's been in the starting phase of business for the past month or so, and now, his brother is coming on as a second 50% member (making it a multi-member llc). While it was still a single-member llc, the company received a signing bonus of $25K. 


I need to value the business for the incoming member. The income and market value methods won't work since the business is new and closely-held. I could use an asset-based approach, but the first member is looking to take out the majority of the $25K signing bonus in the coming weeks. 


They are independent contractors for a larger company and are paid commissions weekly based on the customers they service. Each member will be the source of the business profits through their services to the larger company, and thus, 50% of the incoming profits would be attributable to him and his own service.


Any thoughts on how to value this business?

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Level 15

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