3 ms·
VC: "I am going to buy these goods at $1,000 because that is what they will be worth in the future." You: "Great, how much will you sell them for when they are
by rokhayakebe 12y ago
VC: "I am going to buy these goods at $1,000 because that is what they will be worth in the future."
You: "Great, how much will you sell them for when they are worth that $1000"
VC: "$2000"
You: "And who will buy it at that price when they worth only half"
VC: "Let Wall Street worry about that"
- devinmontgomery 12y agoIt's more like: VC: "I am going to buy these goods at $1,000 today because I expect to be able to sell them for $1,100 in one year". How they arrive at the $1,100 is based on the amount of risk there is and the return they could get on a zero-risk investment. Seriously, finance seemed like mumbo jumbo to me to too before I learned about it. But it's actually pretty interesting. This is the calculation for present value.