A Historical Exit-Based Cash Flow Approach to Valuing pre-revenue Direct-Air-Capture (DAC) Start-Ups

27 September 2023, Version 1
This content is an early or alternative research output and has not been peer-reviewed by Cambridge University Press at the time of posting.

Abstract

Valuing early-stage, pre-revenue companies, particularly those in the nascent field of Direct Air Capture (DAC), is a formidable challenge. These companies often find themselves in pre-pilot, pre-revenue stages, making traditional valuation methods less applicable. However, this paper presents a pioneering valuation methodology tailored to address this challenge. Drawing inspiration from the remarkable exit event of a 15-year-old startup in the same industry, we illuminate a path for valuing early-stage DAC companies. By leveraging this historical reference, we navigate the complexities of assessing potential value in a landscape dominated by pre-revenue startups, offering a vital tool for stakeholders, investors, and enthusiasts seeking to understand the promise of this emerging field. It is important to note that this analysis serves as a starting point for further valuation exploration, recognizing that the dynamic nature of startups may require ongoing assessments and adjustments.

Keywords

Valuation
Startup
early stage
prerevenue
Direct Air Capture
Market Comparable Analysis
carbon Engineering
Novonanmek
technology

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