Key Person Discount Related Topics 
Concannon Miller
FEBRUARY 24, 2022
It's more common for smaller businesses to depend heavily on a key person — and the actual, or even the potential, loss of that individual is likely to have a major impact on value. Key person discounts are applied to reflect the reduction in a company's value resulting from such a loss.
Equilest
MARCH 5, 2023
However, losing a key person can also impact the valuation, resulting in a key person discount that reflects the potential risks and uncertainties associated with their departure. Learn more about key factor discount. "A
Musings on Markets
DECEMBER 10, 2023
In appraisal practice, the effect of the potential loss of an owner, founder or other key person in a business that you are acquiring is usually captured with a key person discount , where you price the business first, based upon its existing financials, and then reduce that pricing by 15%, 20% or more to reflect the absence of the key person.
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