In this video we talk about what is meant by cost of capital or discount rate or hurdle rate, explain what Return on invested capital is and finally the Power law.

A Biotech CEO is supposed to know not only the hurdle rate but equally important is Capital efficiency or return on Invested capital and finally it is important to realise that Biotech returns follow Power law. This is the reason why many VCs when they invest in 10 biotechs, they do not get return from all 10 companies, rather only from 2-3 companies. Rest fail. Welcome to the real world.