What's the average discount rate for a early-stage technology company?IB
My bank works with very early stage companies, and I'm currently looking through some of the models and trying to understand them. WACC is calculated to be ~9% using beta derived by doing comps on capIQ. It looks like we then applied a 80% "liquidity and size" premium. This seems insanely high for me. A 89% discount rate? Is this normal when valuing early stage companies? And if so, how does one figure out how much of a premium/discount to apply?