Since this is what most of the posts are, I thought I would put a retarded subject line. My actual question is below.
Any tips on projecting CAPEX for a pre-revenue company?
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multiply whatever you think it is going to be by two
Keep it in your pants.
Just finesse the numbers to confirm all your internal biases and get the valuation you desire. And I'm talking about sexually desire. Think about the number that you would simp for, the number that will get you the most horny, the most turned on, the number you want to penetrate, the number that you want to fuck all night long. That's the number you should use.
wow
updoot for visibility
so, 69?
Old financials from similar companies that are a little more mature might offer a good ballpark
Thanks. Most of the companies I’m valuing are biotechs, and I’m trying to determine a formula that correlates with R&D (maybe) or perhaps positive clinical trials.
Capex is a very firm-specific expense. The best course of action would be to confirm the internal projection for CapEx spending (Growth CapEx) and create an assumption that the maintenance Capex will hold some relation to revenue or R&D costs.
If you'd like to test the hypothesis that there may be a correlation to R&D and CapEx, look at established Biotech firms and analyze their historical CapEx to R&D costs.
That's the best advice I can provide - hope it helps.
Thanks man I appreciate it. So many of these companies are relying on a projected huge revenue a few years from now that capex and D&A become a major contributor to their DCF valuation. It sucks that it’s so hard to accurately project. Regardless, thanks for the advice. I wish more posts on WSO revolved around stuff like this.
You're in biotech and projecting capex? Are they doing their own manufacturing? If not, you can keep it de minimus to keep it conservative. The bulk of the costs will be in R&D. If they are for some reason mfg on their own and not using a CMO, then yes confirm management projections and have the discussion with management which will help substantiate their projections.
I had such high expectations for this post
How about we return this thread back to its title?
Why are you working with pre-revenue companies??? Are you some kind of cucked boutique boi??
Cucks work with post revenue companies
Even though you can get a gold medal pre-revenue, still the Special Olympics
"post" revenue lol
His title clearly says other. Would you rather be investing in hot early-stage biotech or making PowerPoint presentations for regional fast food chains?
Definitely not early-stage biotech companies - trying to model those is a fucking mess hahaha. Shout out OP, dude is probably neck deep in trying to find a value for a cash-depleted pharma start-up that's running out of money by the end of the year and has no revenue yet has 5 different drugs in FDA trials. God bless!
Change in capex as a % of change in NWC
I used this and it’s actually a lot better then I was trying to average out the rate of growth. Thanks man
I used this and it’s actually a lot better then I was trying to average out the rate of growth. Thanks man
Cheers
I am dissappointed.
U clown
Just want to say that OP is going places
He's born to be a banker. Polish a turd so investors will bite.
Why do you think he's a banker? And are you really retarded enough to think that every pre-revenue pharma/biotech company is a turd? Hope you don't like medicine.
Hahahaha I clicked so fast. Now I'm mad.
Jolly good shit.
Just say you expect them to be fully incompetent and treat everything as CAPEX, usually the case tbh.
you multiply length times diameter plus weight over girth divided by the angle of the tip squared; This would be applied to a forecast pre-rev under assuming 5% annualized growth rate. if growth is >5% then you pro forma for the pitch
I just had a stroke reading this; well done.
Only OGs get the SP reference. Good job, sir.
I'd advise massaging the #s - you want clean, normal #s. Sometimes you gotta adjust and inflate things to make them bigger - you don't want something thats flat, it's just not exciting. But gotta be careful cause it can be expensive to pay up for those bigger things. So deep pockets a must.
Why don't you just ask the hot chick?
damn are we getting clickbait in WSO now?
Idk man this could totally be a metaphor.
CAPEX = money you'll spend simping & paying for dates and what not
Pre-revenue company = The hot chick you havent banged yet.
i was going to send this to a friend and everything. major sadness rn
I feel like we just opened a door that cannot be closed.
Yo I’m going to go on a limb here and say FUCK THE OP AND HIS/HER QUESTION. Let’s all go ahead and address the dilemma listed in the title.
let’s say there’s a fucking dime in your intern or analyst class. Let’s also say you are not tryna have a relationship with this person and you’re just tryna fuckkkk here and there (think fwb). How does one accomplish this?
lol
Pls arrange a draft for tomorrow morning
we need to serve the client
It's best to just look at comps, unless management has their own forecasts.
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