Valuing an unlisted SME: methods and negotiation

Valuing an unlisted SME means setting a negotiated price, backed by calculation methods. For a profitable SME, the most common method multiplies normalised EBITDA by a multiple and then subtracts net financial debt. The gaps between you and the fund almost always come from the assumptions, not from the formulas themselves.

A valuation does not exist in the abstract. It exists on the day an investor agrees to pay a price, and that price rarely comes alone: it arrives with rights attached to the shares. I spent eight years in the business lending department of a bank in Namur, then read a shareholders' agreement from the founder's chair. The lesson fits in one line.

The pre-money figure says almost nothing without the clauses that come with it.

Which methods are used to value an unlisted SME?

Three families of methods coexist. For a profitable, stable SME, the EBITDA multiple dominates; the other two mostly serve as a sanity check.

For a start-up that is still losing money, none of the three really holds. The valuation is then built through negotiation, comparable recent rounds, the amount raised and the stake the fund needs to cover its risk. Pre-money, post-money and net debt are defined in the business financing glossary.

How do you get from an EBITDA multiple to equity value?

In five steps. Take a case built for illustration, not a real file: a manufacturing SME with normalised EBITDA of €1.2m, €2m of financial debt and €0.5m of cash.

1. Compute normalised EBITDA: €1.2m, after removing one-off items and resetting your own pay as owner-manager to a market level.
2. Pick a multiple: 5 in this example. It is a calculation assumption, not a market benchmark.
3. Multiply to get enterprise value: 1.2 × 5 = €6m.
4. Compute net financial debt: €2m of debt minus €0.5m of cash, so €1.5m.
5. Subtract net debt from enterprise value: €6m minus €1.5m leaves €4.5m for the shares.

If a fund then invests €1.5m in equity on that basis, pre-money is €4.5m, post-money €6m, and the fund holds 25%. As a percentage, that means you keep 75% of the shares, provided no options or convertible loans are added to the calculation.

A €1.5m ticket is nothing unusual. It falls inside the range published by ORSA (formerly Investsud, a Walloon evergreen investment fund), €500,000 to €2,500,000, and under the €2.5m ceiling published by both Invest.BW and Namur Invest (checked on each fund's website on 15.10.2026).

What EBITDA multiple applies to a Belgian SME?

There is no official multiple. It depends on the sector, size, growth, reliance on one customer or on the founder, and market conditions at the time. The 15.10.2026 review contains no published multiple: the nine players tracked on this site publish tickets, instruments and areas, not price grids. A multiple quoted without a source or a date is worth nothing at the negotiating table.

What you can calculate is how sensitive your stake is to the multiple. Same example, same €1.5m investment, only the multiple changes:

Here, one point of multiple is worth roughly four to six points of equity. Keep that order of magnitude in mind when you are told the discussion is "only about half a point".

Why does the fund not reach the same figure as you?

Because it does not start from the same assumptions. The formulas are identical on both sides of the table. Four gaps come up in almost every file I have read:

• The EBITDA used. The founder takes the record year; the fund takes an average, or strips out an exceptional contract.
• The multiple. Heavy reliance on one customer or on the founder pushes it down.
• Net debt. Provisions, tax liabilities, leasing: the definition moves the result by several hundred thousand euros.
• Execution risk. The fund values your plan as if it were running late.

The first gap weighs more than people think. If the fund uses an average EBITDA of €1.0m instead of €1.2m, at the same multiple of 5, enterprise value drops to €5m and equity value to €3.5m. The same €1.5m now buys 30% instead of 25%. Two hundred thousand euros of EBITDA, five points of equity.

How do you negotiate the valuation?

Turn up with your own figures, computed with the fund's conventions, and negotiate price and rights as one package. In order:

1. Prepare normalised EBITDA that strips out one-off items and adjusts the owner's pay. Document each adjustment with evidence.
2. Compute net debt yourself using the same conventions as the fund. Ask for its definition: leasing included or not, tax liabilities, provisions.
3. Cross-check at least two methods, for example multiples and DCF, and explain the gap between the two results.
4. Ask the fund for its calculation line by line. A gap on EBITDA is not argued the same way as a gap on the multiple.
5. Put the share class, anti-dilution and exit clauses on the table at the same time as the price.
6. Have your accountant or a company auditor review the whole thing before you sign anything.

Three mistakes come up often. Starting from the valuation of a headline-grabbing start-up to price a manufacturing SME. Negotiating the price without discussing the rights attached to the shares. Confusing enterprise value with equity value, which skews everything else in the calculation.

There is also a side door. If dilution bothers you more than the cost of financing, look at instruments that leave the capital untouched: ORSA publishes a Smart Bond, a 5-to-10-year subordinated loan, non-dilutive, with returns partly linked to EBITDA (terms published by ORSA). No valuation to negotiate in that case, but a cost to compare. The ranking of SME funds sets out the tickets and instruments each player publishes side by side.

A high price with a ratchet can cost more than a low price without one

A high valuation that comes with strong protective clauses, such as preference shares or an anti-dilution ratchet, can cost you more than a lower valuation without them. A ratchet resets the fund's stake if a later round is priced lower. Your 75% today only holds if the company delivers its plan.

I have seen it more than once: the founder wins half a point of multiple, then gives away a liquidation preference without putting a number on it. Negotiate both at the same moment, at the letter of intent and term sheet stage. Afterwards, it is too late.

What does company law require for a capital increase?

A written justification of the price. For a capital increase, the board must justify the issue price in a report: article 5:121 of the Code des sociétés et des associations (Belgium's Companies and Associations Code) for an SRL, article 7:179 for an SA (consolidated text on ejustice). In an SA, a statutory auditor, company auditor or certified accountant assesses the financial data in that report.

The rule is federal. It applies in exactly the same way to a Namur SME bringing in a provincial invest, a Brussels company raising with finance&invest.brussels (the Brussels-Capital Region's public financing body), or a Flemish business dealing with PMV. From one region to the next, the players and their tickets change, not the duty to justify the price. A well-argued valuation therefore does double duty: in the negotiation, then in the report the auditor will read.