I'm making something very simple, so I'm using just fiat. Mostly so I can assume the risk free rate is the 10 year US treasury rate. You want currencies to be consistent throughout the model, and while I could develop a risk free rate with Bitcoin its much more volatile historically so it could get spicy.
Risk free means no risk of default, which I think we could argue USD is no longer so safe in that category and Bitcoin is probably safer than most normies consider. But there is still enough volatility that there remains reinvest risk in Bitcoin. But as you said, a lot of this is made up 🤣 you come up with a method and justify it. I think if I can get what I'm thinking working I might create another version in Bitcoin but for me the big question is if I can take my model and make it an app.
The discount rate for Bitcoin for us would be negative, probably for most here on Nostr except those Monero bros 😂 but for normies it would still be pretty high I think. Although perhaps less high than it's been historically.
The whole reason I'm doing this is because my big brother is making his own animation studio and trying to hire a CFO for equity and it's been a year and no one is interested. I get that he doesn't want his lil sis in the role, and idk if I'd want that either. But I offered to help look at the role to improve the odds of hiring. He has absolutely no financials set up at all. To me, no valuation model in an equity conversion means you're asking people who are used to being paid *a lot* to work as volunteers while you play at the creation part.
He's very skilled, has amazing experience with Oscar winning projects and other long term claymation projects. But it's hard to talk to him about finance because he doesn't want to think about it, he just wants someone to do it for him. So this is something that might help him, and it'll be decent for showing my strength in my portfolio so that'll help me.
