DAAdmin

Early-stage founders struggle to put a price tag on their company when still early in development and commercialization.

The ‘why this is’ is revealed by identifying the solution.

First, we need to understand that capital markets are competitive. Interest rate “spreads” are the easiest way to understand risk vs. financial reward. When a U.S. Treasury bond (considered “safe”) pays 5%, then how much more needs to be paid for a riskier investment? For example, a home mortgage, inventory loan, or an investment in a pre-clinical oncology company?!

Early-stage founders struggle to put a price tag on their company when still early in development and commercialization.

The ‘why this is’ is revealed by identifying the solution.

First, we need to understand that capital markets are competitive. Interest rate “spreads” are the easiest way to understand risk vs. financial reward. When a U.S. Treasury bond (considered “safe”) pays 5%, then how much more needs to be paid for a riskier investment? For example, a home mortgage, inventory loan, or an investment in a pre-clinical oncology company?!