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Photo by Jack Millard on Unsplash

Investors valuate startups based on assumptions.

Multiple-based valuation assumes that companies in the same industry with a similar growth rate will create similar value.

Comparable company analysis assumes that two different companies working on the same problem to a certain level have a similar growth trajectory.

DCF assumes that the discount rate and cash flows are stable.

However, all these assumptions have flaws.

Early-stage startups take time to generate revenue.

No two companies are exactly the same.

Investors can nominate an expected discount rate, but the long term cash flows are far from predictable.

First Chicago Methods is a variation that combines Multiple based valuation and DFC in a few steps.


I visited Cockatoo Island for Biennale a few weeks ago and there was an exhibition on the plastic from the ocean and the impact on the wild animals and our ecosystem. This exhibition prompted me to study more about the problem.

I spent a few mornings researching, and here is what I have learnt so far.

One graph:

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The increasing production vs. the low recycling rates

The global plastic production has been exponentially growing for decades. Plastics are very persistent — they are designed this way.

Australia, in 2017–2018, only recycled 10% of plastics. Other countries, especially the developing countries in Asia, have even lower recycling percentages because plastic recycling is often financially unviable. …


Time management tips from a psychiatrist

If you are reading news or checking emails the first thing in the morning, you are doing it wrong.

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Photo by Fabrizio Verrecchia on Unsplash

One of the most practical books that I have read this year is 脳のパフォーマンスを最大まで引き出す 神・時間術 by a Japanese psychiatrist 樺沢 紫苑. This book talks about how we can manage time from a scientific perspective. As this book doesn’t have an English copy, I have summarised some takeaways to share with you.

Here are some great tips from this book that have helped me find more time in my day.

The morning golden 2 hours

Our brain is the clearest for hard problem-solving in the first 2 hours of the day. Instead of reading news or checking emails, it is best to do the focus work that needs the most concentration in these 2 hours. A quick shower or morning exercise also help to kickstart our brain. …

About

Stella Xu

deeptech investing @mseq.vc

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