All underlying characteristics and assumptions used by popular financial theories and models do not hold up for startups,even up to an IPO.

Question

Quizplus · Accepted Answer

Startups differ from established companies in many ways, and therefore assumptions used for traditional financial theories and models may not apply to them. Startups have high uncertainty, limited historical financial data, unique funding options, and a strong dependence on the success of a single product or service. These factors make it difficult to forecast future performance accurately, making it hard to apply traditional models.

All Underlying Characteristics and Assumptions Used by Popular Financial Theories