Please can someone explain to me what ‘discount rate’ is when angel investing?
For example, $6,000,000 business valuation, discount rate is 85%, with an investment of $16,000.
In: Other
company evaluation x discount rate = effective company evaluation
(6,000,000 x 85%) = 5,100,000
investment / effective evaluation = ownership
16,000 / 5,100000 = 0.31% ownership
they do this to compensate for the risks
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