INDEPENDENT BUSINESS VALUATION SPECIALISTS
XVALUNITED
KINGDOM

Growth shares & restricted securities
Hurdles set on solid ground.

A growth share usually participates only in value above an agreed hurdle. Its value depends on the distribution of future outcomes, the waterfall and the security’s rights—not simply on the fact that today’s company value falls below the hurdle.

Request a proposal Read the technical brief
Independent opinionSame-day reviewStrictly confidential

Hurdle

Set at or above current value

ITEPA Pt 7

Employment-related securities

Option-style

Waterfall & probability modelling

A confidential conversation

An important decision deserves an independent view.

Tell us about your company, your objectives and your timeframe. We will review the instruction before proposing a scope, fee and delivery timetable.

  • Independent opinion, never an automated estimate
  • Scope, fee and timetable agreed before work begins
  • Confidential from the outset

Prefer to call? +44 20 3996 6807

Prefer WhatsApp? Message us on WhatsApp

What happens next

  1. 1.We review your enquiry the same working day
  2. 2.A short call to understand your circumstances
  3. 3.A written scope, fee and timetable is proposed

No obligation. No automated valuation. No documents required.

When you need it

Typical situations
we are instructed on.

01

Issuing growth or flowering shares

02

Setting the hurdle for a share class

03

Employee subscriptions and s.431 elections

04

Reorganisations of share capital

Technical brief

Model the economic waterfall

We examine preference rights, hurdle mechanics, vesting, leaver provisions and dilution. The analysis tests how proceeds are allocated under a range of exit values. Option-pricing or scenario methods may be relevant, but their volatility, time horizon and probability assumptions require support.

Document restrictions and elections

Restricted securities may raise issues under Part 7 of ITEPA 2003, including a possible section 431 election. Valuation, tax treatment and election decisions must be coordinated with legal and tax advisers. This report does not replace advice on filing requirements or deadlines.

Reconcile the result to company value

A valuation of one class must be consistent with the company’s overall equity value and the rights of every other class. Recent funding can be informative but must be calibrated for preference terms, timing and differences between investor and employee securities.

Methodology

The methods we apply — and why.

01

Equity waterfall

Allocation of exit values across share classes according to the articles.

02

Option-pricing models

Black-Scholes or Monte Carlo approaches to capture asymmetric upside above the hurdle.

03

Scenario analysis

Probability-weighted exit outcomes to test the value of each class.

Key valuation issues

Where value is won or lost.

Hurdle defensibility

A hurdle set below current value creates immediate value and tax exposure.

Volatility assumptions

Option models depend heavily on volatility and timing inputs, which must be evidenced.

Article drafting

Waterfall mechanics in the articles drive value; ambiguity creates risk.

Section 431

Elections are made on unrestricted value; the report should support both figures.

Your instruction, clearly defined

Scope agreed before work begins.

We agree the valuation purpose and date, the interest being valued, the methods considered, the information required and permitted reliance. The written proposal sets out the fee, VAT treatment and delivery timetable. The result is a documented expert assessment — not a transaction guarantee or an automated estimate.

Primary sources & professional references

ITEPA 2003, section 431 — Restricted securities electionsHMRC — Shares and Assets Valuation ManualIPEV — Valuation Guidelines

General technical information. Legislation must be checked at the instruction date. Legal, tax and accounting advice are outside the valuation scope unless expressly agreed.

Questions

They can have low value, but rarely zero; we quantify it.

Related expertise

Other valuations we perform.

All valuation services
Probate & inheritance tax

Probate & inheritance tax

Date-specific valuations of unquoted shares for estates and tax reporting.

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EMI & employee share schemes

EMI & employee share schemes

AMV and UMV analysis for employee options and share-based incentives.

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Succession & family transfers

Succession & family transfers

Establish a clear value for family succession, gifting and long-term planning.

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