In some cases, a company’s internally generated funds and available bank debt are not adequate to finance growth and an IPO is either not feasible or not desired by the shareholders. Under these circumstances, private sources of debt and/or equity may provide the needed financing. In many cases, privately placed debt is issued to the financing source with warrants or other equity features attached. Whether the financing vehicle is straight equity or debt with attached warrants, the company will be well served by an independent valuation. If the securities are sold at too low a price, the company will incur an excessive cost of equity capital and existing shares will be diluted to a greater extent than necessary. The variables most frequently negotiated in these situations are the company’s financial projections and the appropriate discount rate or cost of capital to apply to these projections. Both of these factors are carefully weighed in a comprehensive valuation.