You Need To Ask About Perth Valuers

Actually going to be worth a hundred xci DA at that point years into the future for this to work first off we have to assume that revenue operating income and free cash flow take years to materialize as they usually do the startup this is otherwise known as the hockey stick forecast this alone presents far greater risk than what you see with a normal company we also have to have a discount rate that’s vastly higher to represent that risk opinions different the exact great to use but some people.

Go as high as eighty percent if it’s a company that has nothing no product no team no revenue maybe some small prototype or something like that maybe one person working on it and the discount rate will go lower and lower the more the company develops and starts getting revenue and real customers and then the third difference that emerges from all this is that for more of the company’s value comes from the present value of the terminal value so if you look at it her ewe were on percent.

coming from that this would be far too high for any-normal company normally we don’t like to see over fifty percent but for a tech startup like this it’s so speculative it is heavily based on that terminal value so in short would say that it’s not completely crazy that a tech startup with no revenue could be worth billions of dollars or at least a billion dollars it’s just highly speculative because what if no one download the app what if it takes two to three years longer than expected to monetize at fifty percent discount rate those two to three years matter.

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