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How is my company valued when it goes public?
In a direct listing or a reverse merger, the starting valuation is set by the price of the company's last private raise, which usually becomes the first trade. No banker sets it. After the first trade, the market decides, and the price can go anywhere.
Joel Arberman, Meraki Partners · Reviewed October 2026. Based on 17 companies taken public since 1999: 11 by direct listing, 4 by reverse merger and 2 by IPO.
Who decides what my company is worth before it lists?
You and your investors. The company sets a price for its private placement, and the people who know you decide whether to invest at that price. If they invest, that price is your valuation going in. That is why the plan, the team and the track record matter so much before the raise.
Is the valuation set by an investment bank?
Only in an IPO, where an underwriter prices the offering with its investors. In the routes we use most, there is no underwriter. The last private placement price is the anchor.
What happens to the valuation after the first trade?
The market sets it, and early on there may be very little trading. Being public does not mean strangers will want to buy your stock. The price comes to reflect the business as it builds substance and traction: revenue, profit, acquisitions and the story you deliver on.
Why are public companies often valued higher than private ones?
Private companies usually sell for a modest multiple of earnings. Public companies with a liquid stock, audited numbers and a growth story are often valued higher. That gap is one of the four levers of being public, and it is why selling to private equity can leave a lot on the table.
Can I set a high price to start?
You can try, but the people you raise from have to agree, and a price far above what the business supports tends to fall once trading starts. We recommend a price your network will invest at with conviction, and room for the stock to go up.
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Want to talk it through?
Tell us where you are, and we’ll set up a first conversation about whether going public belongs in your plan and what it would take. If it isn’t right for you, we’ll say so.