Discount Rate
topic on 3 shows · 5 statements across 5 episodes
the Y Combinator Startup Podcast 
Capital Allocators 
20VC
5 statements about Discount Rate, every show
Salem: 40 years of falling interest rates provided massive industry tailwinds
“Those of us who entered the money management industry roughly when I did had essentially a forty-year tailwind of falling discount rates in the global economy generally. Which creates multiple expansion. What does that favor? It favors all kinds of enterprises…”
Carney: 1% central bank rate hike increases risk discount rates 1.5–2.5%
“What tends to happen when interest rates increase is that there is a amplified impact on the interest rates of risk assets or the discount rates on risk assets. So if the bank rate goes up by one percentage point, the discount rate tends to go up by one and a …”
Carney: A 1% rate hike raises risk asset discount rates 1.5%-2.5%
“So if guilt rates go or the bank rate goes up by one percentage point, you tend, the discount rate tends to go up by one and a half to two and a half points, depending on where the asset is on the risk spectrum.”
Economic models must match market discount rates rather than picking arbitrarily.
“You don't get to pick a discount rate. You have to match it to the discount rates you see in the market.”
Levy: Typical startup SAFE discount rates range between 10% and 20%
“Typical discount rate ranges in between 10 and 20%, so for example, ah, if the series A round that your SAFE is converting in is the lead investor has priced it at a dollar per share, and you've negotiated a 20% discount, your effective price is 80 cents a sha…”