Stag Rock CPA
Private business valuation grounded in the fundamentals of the business and the realities of the market.
Stag Rock CPA, PLLC provides private business valuation services for business owners, shareholders, and their advisors. This is a small, selective practice. We take on a limited number of engagements at a time, and the scope and methodology are tailored to the specific circumstances of the business and the purpose of the valuation.
The work draws on the same valuation discipline that underpins Stag Rock LLC, our registered investment advisory practice. The difference is the subject. Rather than evaluating publicly traded securities, we apply that framework to private businesses, where the stakes are often personal and the data is generally not as clean as that of publicly traded peers.
We are based in Virginia Beach, Virginia, and work directly with clients in person. Valuation engagements require a real understanding of the business, its operations, and its people. That starts with sitting across the table.
For clients of Stag Rock LLC, our investment advisory practice, we also prepare individual tax returns on a limited basis.
A credible valuation requires more than one lens. We apply three established approaches and reconcile them based on the facts and circumstances of each engagement.
Valuation engagements arise in a range of corporate and tax contexts. Common situations include:
Buy-sell agreements, partner buyouts, minority interest redemptions, ownership transitions, and shareholder disputes where an independent opinion of value is needed by one or both sides.
Determining fair market value when issuing stock to employees, key managers, or new partners. This includes equity grants, restricted share awards, and any transaction where the IRS requires a defensible valuation at the time of issuance.
Strategic decision-making, capital allocation, ownership restructuring, and gift tax compliance involving closely held business interests. Understanding what the business is worth today informs what it could be worth under different scenarios.
Every engagement starts with an initial meeting. We sit down together to understand the business, the purpose of the valuation, the valuation date, and who will be relying on the report. That conversation determines the scope of the engagement and the type of report we produce. Our reports follow the structure and framework of the AICPA Statement on Standards for Valuation Services No. 1 (SSVS No. 1), which defines two types of engagements. The process and deliverable are different for each.
Valuation Engagement
This is the most comprehensive level of service. The valuation analyst is free to apply whatever valuation approaches and methods are deemed appropriate, and the result is a conclusion of value. This is the standard when the report needs to stand up to external scrutiny, whether that means the IRS, a court, a regulatory filing, or a counterparty on the other side of a transaction.
The process begins with establishing a data room. We request the corporate documents that define the business: organizational filings, operating agreements, shareholder agreements, capitalization tables, and any relevant contracts or legal proceedings. We also request historical financial statements and tax returns. This is the foundation of the analysis, and thoroughness here matters.
We then conduct in-depth management interviews and, where appropriate, visit the business itself. The people running the business understand it better than anyone, and those conversations inform how we evaluate the company's operations, competitive position, and risk profile. A site visit adds a dimension that financial statements cannot capture: the condition of the facilities, the equipment, the workflow, and how the operation actually functions day to day. These firsthand observations strengthen the analysis and support the credibility of the report if it is ever scrutinized by a counterparty, a court, or the IRS. We also research the broader economic and industry environment independently to place the business in context.
Financial projections are a critical input, particularly for the income-based approach. Management is in the best position to articulate realistic expectations for revenue growth, margin trajectory, capital needs, and strategic direction. We work with the client to develop or refine those projections, pressure-test the assumptions, and translate them into the valuation model. The quality of the projections directly affects the quality of the conclusion.
The deliverable is a written report documenting the full analysis: scope and standard of value, economic and industry overview, business description, company-specific risk considerations, financial statement adjustments, valuation assumptions, and the reconciled conclusion of value. Supporting schedules, exhibits, and source citations are included in the appendices. The report may be issued as a detailed report covering the complete analysis or a summary report presenting the key findings in a more condensed format.
Calculation Engagement
A calculation engagement is more limited in scope. The valuation analyst and the client agree upfront on the specific valuation approaches, methods, and extent of procedures to be applied. The result is a calculated value rather than a conclusion of value. Because a calculation engagement does not include all the procedures required in a valuation engagement, the process is lighter and the timeline is typically shorter.
The data requirements are narrower. We still need financial statements and the key corporate documents, but the depth of independent research, the scope of management interviews, and the level of projection development are all scaled to the agreed-upon procedures. In some cases, the client may already have projections or a preferred methodology in mind, and the engagement is structured around that framework from the start.
The deliverable is a calculation report that documents the agreed-upon procedures and the resulting calculated value. Calculation engagements are typically appropriate for internal planning, preliminary transaction discussions, or situations where both parties need a grounded estimate of value without the full scope of a valuation engagement.
Oral Reports
For either type of engagement, the SSVS framework also permits an oral report as the deliverable. In those cases, the findings are communicated verbally rather than in a written document. This can be appropriate for early-stage planning conversations, a preliminary read on whether a transaction price is reasonable, or other situations where a formal written report is premature. The underlying analysis is still documented internally, but the client receives the conclusion through direct discussion rather than a bound report.
We determine the right engagement type and deliverable format during the initial consultation, based on the purpose of the valuation, its intended audience, and how it will be used.
Stag Rock CPA does not delegate the analytical work. The person who builds the model, writes the report, and defends the conclusion is the same person you speak with throughout the engagement. That continuity is by design.
Reed founded Stag Rock CPA in conjunction with Stag Rock LLC, his investment management firm. His professional background spans investment banking at Moelis & Company in New York, portfolio management, and eleven years of naval aviation including service as a TOPGUN graduate and instructor pilot. He is a Boeing 777 airline pilot with a major cargo carrier.
To discuss a potential engagement or learn more about our valuation practice, please reach out.