: ▁▁ ▁Start - ups ▁seeking ▁money : ▁ 5 0 – 1 0 0 % ▁ ▁Early ▁start - ups : ▁ 4 0 – 6 0 % ▁ ▁Late ▁start - ups : ▁ 3 0 – 5 0 % ▁ ▁M ature ▁companies : ▁ 1 0 – 2 5 % ▁ ▁The ▁higher ▁disc ount ▁rate ▁for ▁start - ups ▁reflect s ▁the ▁various ▁dis adv antages ▁they ▁face , ▁compared ▁to ▁established ▁companies : ▁▁ ▁Red u ced ▁market ability ▁of ▁own ers hips ▁because ▁stock s ▁are ▁not ▁trad ed ▁public ly ▁ ▁Limited ▁number ▁of ▁invest ors ▁willing ▁to ▁invest ▁ ▁High ▁ris ks ▁associated ▁with ▁start - ups ▁ ▁Over ly ▁optim istic ▁forec asts ▁by ▁enthus i astic ▁found ers ▁ ▁One ▁method ▁that ▁looks ▁into ▁a ▁correct ▁disc ount ▁rate ▁is ▁the ▁capital ▁asset ▁pr icing ▁model . ▁This ▁model ▁takes ▁into ▁account ▁three ▁variables ▁that ▁make ▁up ▁the ▁disc ount ▁rate : ▁▁ 1 . ▁R isk ▁free ▁rate : ▁The ▁percentage ▁of ▁return ▁generated ▁by ▁invest ing ▁in ▁risk ▁free ▁se cur ities ▁such ▁as ▁government ▁b onds . ▁▁ 2 . ▁B eta : ▁The ▁measurement ▁of ▁how ▁a ▁company ' s ▁stock ▁price ▁react s ▁to ▁a ▁change ▁in ▁the ▁market . ▁A ▁beta ▁higher ▁than ▁ 1 ▁means ▁that ▁a ▁change ▁in ▁share ▁price ▁is ▁ex agger ated ▁compared ▁to ▁the ▁rest ▁of ▁shares ▁in ▁the ▁same ▁market . ▁A ▁beta ▁less ▁than ▁ 1 ▁means ▁that ▁the