Discount for lack of marketability (DLOM)

Also called: DLOM, marketability discount

In one line

A reduction in value applied to private shares because they can't be easily or quickly sold.

In plain English

Because private shares are hard to sell, appraisers and buyers knock a percentage off their theoretical value — the DLOM. It's a big reason private common stock is valued below the headline round price.

If you were explaining it to a 5-year-old

A toy you can't easily sell is worth less than the same toy in a busy shop — so people pay you less for it.

Why it matters when you sell

DLOM is a core reason your secondary sale price will sit below the last round's price; expecting it helps you negotiate realistically.

Put it to use

What's a fair discount?

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Discount for lack of marketability (DLOM)

Related terms

Put it to use