Generally there are two discounts considered in the valuation of a closely held business: 1) Lack of Marketability (Liquidity) and 2) Minority Interest (Lack of Control). The marketability (or liquidity) discount will apply in most valuation situations of privately-held companies. The data used in developing the appropriate discount or capitalization rate applicable to the subject company’s cash flow measure is based upon empirical evidence associated with publicly traded companies. As the interest being valued is likely not actively or freely traded on an open market, the degree of marketability (liquidity of the interest) between the privately-held company interest and that of the shares on which the discount data is derived is materially different, giving rise to the concept of a lack of marketability discount. The minority discount will only apply when the interest being valued is a minority or non-controlling interest. The valuation conclusion is made only after the minority interest discount and the lack of marketability discount have been applied. However, the two discounts are not unrelated. In fact, a marketability discount might be higher because the valued interest is a minority interest. While the two discounts should be applied separately, they should be considered together.