There is a simple rule that operates in the valuation of companies but it works for almost anything.

Buyers perceive value. Vendors aspire to price.

Only a buyer of a business can place an individual value on it. It’s a very personal value from a buyer with only one footprint. No one else can stand in that footprint. It’s very personal. That value is perceived based on a dozen assumptions of integration, strategic fit, owning it under the rules of that specific buyer.

Sellers or vendors of a business can only aspire to price. They are not writing the check. They can base that aspiration on a dozen assumptions, comparables, sector averages, multiples of sales, what their buddy at the golf club got for their business, what they need to buy the house in Nantucket. But it’s just aspiration.

Of course sellers of businesses have one small advantage in this game. They own the shares.