Super hot chick in my intern group

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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Comments (57)

Jun 6, 2021 - 3:53pm

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.

Jun 6, 2021 - 5:43pm

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Jun 7, 2021 - 11:01am

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Jun 6, 2021 - 4:22pm

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.

Jun 6, 2021 - 4:30pm

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.

Jun 6, 2021 - 4:42pm

Like with many companies, the more data you have, the more reliable the forecast. If CapEx has alwys been $x a year, and you think that it may rise, then you know it'll be $x + 5-10% variance. I think with companies like this, any forecast is better than none. It helps to account for it (and overbudget), and then adjust the equation/approach for the coming quarters/years. 

Jun 9, 2021 - 11:22pm

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. 

  • Analyst 2 in IB-M&A
Jun 6, 2021 - 5:48pm

Why are you working with pre-revenue companies??? Are you some kind of cucked boutique boi??

  • Analyst 2 in IB - Ind
Jun 6, 2021 - 10:30pm

His title clearly says other. Would you rather be investing in hot early-stage biotech or making PowerPoint presentations for regional fast food chains?

  • Analyst 2 in IB-M&A
Jun 7, 2021 - 3:06pm

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! 

  • Analyst 2 in IB - Ind
Jun 8, 2021 - 2:06pm

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.

Jun 7, 2021 - 4:14pm

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.

  • Intern in IB-M&A
Jun 9, 2021 - 3:17am

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?

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