You are an analyst working for a major investment bank, and you have been approached by ByteDance Ltd, a Chinese internet technology company, to buy a 5% equity share in the firm. Your manager has asked you to provide research into the company and its valuation. As with any privately owned companies, the valuation is tricky, as ByteDance is not bound by the same disclosure requirements as a publicly listed company.

1) Critically analyse the difficulties in the valuation of private companies and apply your findings in the case of ByteDance.

2) Critically evaluate the political risks of this investment in light of the recent clampdown of the Chinese authorities on local tech companies.