Over the years I have been asked to calculate discounts for lack of marketability and control for minority business shareholder buy backs. It bothers me that business owners in need of operating capital for their business will sell minority interests, but when it becomes time to buy out these minority interest they expect the value to be discounted (these discount can be as much as 40%). They are happy to take the investment money and at times not even pay any yearly dividends but reluctant to pay back the full value of the minority shares. I can see that if a minority shareholder tries to sell his shares on the open market these discounts may apply, but it also seems to me to be unreasonable for a stock buy back to go this route. If you or any of your clients are considering a minority investment in a business make sure the sale contract contains language that prevents the business from discounting minority share values upon buy back. If you are going through a buy back, get an appraisal on the business. Business owners tend to offer lower values on stock buy backs than the stocks are actually worth. My experience is that businesses buying back their minority shares tend to offer 50% or less for these shares before consideration of any minority discount.