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by Undo Capital
December 15, 2025
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What Is Valuation Method (e.g., FMV for EMI)?

A valuation method is the approach used to determine the fair value of a company’s shares, such as Fair Market Value (FMV) for EMI option grants.

Valuation Method (e.g., FMV for EMI) Meaning

The valuation method meaning centres on establishing a defensible share price for tax, investment or option purposes. To define valuation method in practice, companies may use approaches such as discounted cash flow (DCF), comparable company analysis, revenue multiples or asset-based valuations. For EMI options, FMV is essential: HMRC-approved valuations ensure that employees receive tax-efficient options and avoid unintended income tax charges. A clear valuation method definition matters because accurate valuations affect strike prices, dilution, investor negotiations and compliance. Valuation methods stand for transparency, fairness and alignment between founders, employees and investors.

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Disclaimer: Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. We do not provide investment advice, financial advice, or tax advice, nor are we regulated by the Financial Conduct Authority (FCA). Participating in startups and early-stage enterprises carries inherent risks, including limited liquidity, absence of dividends, potential loss of investment, and dilution. Any decisions regarding investments should be made independently by the investor as part of a well-diversified portfolio.