Out of WACC
The science behind investment evolves in an exponential manner. As time has passed, the number and complexity of valuation methodologies has expanded. Yet the principles of the businesses whose value is determined by these models have remained reassuringly stable.
Identify a market for your idea, product, or service. Build a financial structure that maximizes the sustainable return for your investment, preferably in something tangible like cash. Innovate around your product or service so that, when new market opportunities arise, you are capable of meeting them. Origination, execution, innovation. The “Red Thread” running through is knowledge.
Knowledge is gained through the exchange of ideas, debate, leading to understanding and consensus. Knowledge is king in a world where the Risk-Free Rate is best described as uncertain and individual Beta can appear Alp-like in graphical form. We embrace a world where what you know and with whom you work is placed alongside, not subservient to, stochastic analyses.
There is method in our approach: we work with entrepreneurs and investors to achieve the results they need and deserve. We do not apply the same model, over and over, and expect different results. Through the coming six months, Follow the Entrepreneur will be hosting a series of “The Future of..” briefings in which we will showcase origination, execution, and innovation.
We can debate the CAPM, but we would rather focus on the Journey. Join us on 28 May for “The Future of Digitization and Sustainability”.