Determining the right value for a business share is always complex—but when your co-founder is narcissistic or combative, valuation disputes can derail your exit. For North Carolina businesses valued at $1 million or more, understanding common appraisal pitfalls and statutory nuances is essential. In this article, we highlight five valuation traps that savvy entrepreneurs avoid—and the methods you should build into your operating or buy-sell agreement to ensure a fair and enforceable outcome.

Pitfall 1: Relying Solely on Past Net-Asset Value

A narcissistic partner may inflate intangible assets or understate liabilities. Insist on a discounted cash-flow (DCF) or market multiple approach as a backup.

Pitfall 2: Ignoring Minority-Interest Discounts

If you’re acquiring a minority stake, apply a marketability discount—otherwise you overpay for less control.

Pitfall 3: Overlooking Tax Consequences

Different valuation methods can trigger unexpected tax liabilities. Coordinate valuation with your CPA to minimize capital gains or gift-tax exposure in NC.

Pitfall 4: Skipping Independent Appraisal Clauses

Without an explicit appraisal right, a narcissistic partner can block your preferred method. Include a mechanism for selecting a neutral valuation expert.

Pitfall 5: Failing to Define Valuation Date

Specify whether valuation happens as of the demand-letter date or closing date. Market swings can be weaponized by a partner intent on delay.

Meet Brandon Forbes
A retired Special Operations officer and Purple Heart recipient, Brandon Forbes applies military-grade discipline to corporate valuations. Since 2016, he’s defended NC owners in high-stakes separation and buy-out disputes.

Secure Your Fair Valuation
Avoid these common traps—reach out for an NC Valuation Review with Brandon Forbes. Let’s ensure your exit reflects true market value. We will work tirelessly to help you exit your partnership, aiming to negotiate but preparing for litigation.