[pstrazzulla]

Growth is important, especially if gross margins are high and >50% of new revenues goes to the bottom line to decrease losses or eventually increase profits. It's tough though, the real questions becomes when does growth stop, which is a function of market size and profitable customer acquisition channels.

The discount rate is fairly arbitrary. You can use something like the CAPM to get to your cost of equity, but it's more designed for slower growth companies. I prefer to think of the gambler analogy where you're trying to figure out the percent chance of getting paid back. Of course, it's SO HARD to figure out the probability of a startup continuing on its current path given the many variables. This is where the "artists" of the world can capture a lot of value.