SCRP (Specific Company Risk Premium)

The SCRP (Specific Company Risk Premium) is an additional premium added to the cost of equity in the CAPM to reflect risks specific to an unlisted company not captured by its beta: key person dependency, customer or supplier concentration, governance weaknesses, technology or regulatory uncertainty. It complements the size premium in the non-systematic risk component of the cost of equity. Its documented justification is essential in valuation reports submitted to tax authorities, auditors and courts. See our dedicated article.

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Example: for a Swiss deep tech startup in pre-commercialisation, Hectelion retains a 4.5% SCRP across three documented factors: founder key person dependency (1.5%) — departure of either founder would eliminate 60% of core IP knowledge; single pilot client concentration (1.5%) — 100% of test revenues depend on one agreement; regulatory approval uncertainty (1.5%) — certification expected but not guaranteed. Resulting WACC: 15.5% vs 11.0% without SCRP.

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Each SCRP component retained by Hectelion is individually documented with qualitative and quantitative references defensible before regulatory authorities and courts.