Founders, especially cross-border startups, need their Equidam valuation to reflect real risk and opportunity, not just where the company is incorporated.
Why does the country setting matter?
That one dropdown drives core inputs: your discount rate (via risk-free rate and market risk premium), survival curve, corporate taxes, and the local fundraising anchors used by Scorecard and Checklist. A mismatch can overstate value (hurting credibility) or understate it (leaving money on the table).
Which parts of my valuation change with country?
Risk-free rate (10Y gov’t bond) → discount rate
Market Risk Premium (MRP) → discount rate
Survival rates → weights on projected cash flows in DCF
Corporate tax rate → profits and free cash flow
Scorecard average valuation → base pre-money anchor
Checklist maximum valuation → ceiling anchor
Benchmarking (e.g., Valuation Delta™) also lets you compare with peers by country, but it’s for context—not a formula input.
What’s the simple rule of thumb?
Choose the country where your business actually “lives” economically—where you operate, hire, and expect most revenue in the next 24–36 months. That’s the risk profile investors are underwriting.
I’m cross-border. How do I decide?
Use this quick checklist:
Revenue locus (next 24–36 months): Where will most revenue originate?
Team & cost base: Where are you building and spending?
Tax residency: Do your projections reflect the correct corporate tax?
Funding market: For Scorecard/Checklist anchors, use the geography that reflects the market you actually compete in.
Example: Kenya operations + Delaware C-Corp—what country should I pick?
Kenya. If your customers, team, and execution risk are Kenyan, your risk-free rate, MRP, survival curve, and default corporate tax should be Kenyan as well. That keeps the discounting and cash-flow mechanics coherent with reality.
Could that company exceed local benchmarks by raising in the U.S.?
Potentially, yes—but it isn’t automatic. Access to U.S. investors can support larger rounds at somewhat higher valuations than local peers if you show why your upside justifies a higher risk profile: meaningful traction and growth, strong unit economics, governance/reporting that meet U.S. expectations, credible references/accelerators, and a clear path to scale beyond the home market.
Why not just select “United States” to get a higher number?
Because it breaks coherence. Investors will test whether your risk inputs match where you really operate. Selecting a country that doesn’t reflect your execution and market risk reads as inconsistent and can slow or derail a round. It’s usually better to pick the accurate country and negotiate toward the high bound of that range, supported by evidence, than to mislabel the business for a headline number.
Common mistakes to avoid
Defaulting to the holdco country: Incorporation ≠ operating risk.
Confusing benchmarking with inputs: Benchmarks inform context; they don’t replace risk-free rate, MRP, or survival curves.
Ignoring taxes: Ensure the statutory corporate tax in projections matches where profits are taxed (override defaults if needed).
Over-relying on one method: Equidam blends five methods; weights shift with stage. Keep the whole mix in view.