Number of years until company becomes self-sufficient
This is the number of years that we would need outside funding for (until we made enough profits to sustain ourselves). This is an estimate based off the fact that Beyond Meat expect to be profitable by the end of this year/​the start of next year which is 11 years after they were founded. (1) This is the lower end of the range. I have doubled this estimate to get the higher end of this range as we are unlikely to be anywhere near as successful as Beyond Meat.
1. Beyond Meat is actually succeeding at all. A company we start could just fail completely. So we should consider the probability of failure, too. In expectation, a company that fails early may have lower costs, financial returns and welfare impact, but may or may not have higher net costs because of reduced returns. (It could also have higher costs if we keep pouring more money into it to keep it afloat.)
2. Self-sufficiency in terms of net profits isn’t our goal, self-sufficiency in terms of ~0 further net EA funding going in is. Maybe also EA investors being able to sell their shares, too.
1. That is a good point, I did implicitly try and account for the probability of success when estimating the probability of the different potential scenarios (IF launch, we launch, both launch) in this model, but this was never done explicitly as its own factor. To account for this, we could multiply the expected impact by the expected probability of success (the average food start-up has a ~10% probability of success).
2. Yeah I agree that this would be more realistic, we just assumed that all funding would be donated to make the CEA simpler.
From the model:
I think there are two issues with this:
1. Beyond Meat is actually succeeding at all. A company we start could just fail completely. So we should consider the probability of failure, too. In expectation, a company that fails early may have lower costs, financial returns and welfare impact, but may or may not have higher net costs because of reduced returns. (It could also have higher costs if we keep pouring more money into it to keep it afloat.)
2. Self-sufficiency in terms of net profits isn’t our goal, self-sufficiency in terms of ~0 further net EA funding going in is. Maybe also EA investors being able to sell their shares, too.
1. That is a good point, I did implicitly try and account for the probability of success when estimating the probability of the different potential scenarios (IF launch, we launch, both launch) in this model, but this was never done explicitly as its own factor. To account for this, we could multiply the expected impact by the expected probability of success (the average food start-up has a ~10% probability of success).
2. Yeah I agree that this would be more realistic, we just assumed that all funding would be donated to make the CEA simpler.