Equidam

APRIL 26, 2025

Valuation as a Process, Not Just a Number A common misconception is that startup valuation aims to pinpoint a single, definitive “right” number representing the company’s price. This incorporates the risk-free rate, a market risk premium specific to the company’s country, and Beta ($beta$).

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

Equidam

APRIL 22, 2025

10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] to 2.5% [23] , [2] ) to ensure mathematical validity. [2]

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64

Equidam

APRIL 22, 2025

6] The valuation represents the market’s expectation of future performance, growth, and eventual returns. [1] 1] [4] It’s an exercise in assessing potential [6] , requiring investors to place bets on a future that is, by definition, uncertain. [14] This premium rises when perceived market risk increases. [27]

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52