The thesis of capital
More capital, more projects in parallel: the multiplier effect.
The bigger the budget Volcano puts to work, the more R&D projects run in parallel. The number comes out by itself: the capital available each year divided by the average cost of a project. This page builds the income statement of the average project (revenue minus the total costs of the activity) and shows in a single chart how the treasury and private capital recover their investment. The numbers are indicative, with the assumptions in view and in your hands.
5 min read
The premises, on display
An exercise in scale, not a promise.
Declared averages, editable, indicative; the detail of each control lives written under its slider. The rules of the system: the number of projects in parallel COMES OUT ON ITS OWN, annual capital divided by cost per project (if they coincide, exactly one runs). During the R&D the treasury bears the tax part of the cost and already recovers through the employment route (≈65% of the cost goes to staff at ≈€55,000 per post; of that payroll ≈40% comes back between contributions and income tax). Afterwards, the profit and loss account is built BY SUBTRACTION: revenue minus total costs; the profit is not chosen, it emerges. ≈30% of total costs are staff (≈€40,000 per post); on the profit the 4% ZEC corporate income tax is approximated, and the returns to private capital are the profit after tax (the tax investor recovers through the deduction: their number lives in the simulator). And the biggest premise: the scenario assumes that every project reaches port, the optimistic bound; the honest distribution is in the map of risk and reward. None of this is a forecast: a rule of three for orders of magnitude, indicative throughout.
The system in your hands
Move the capital and watch the projects.
The average project, in steady state
Cost of the R&D: –
Tax part of the cost: –
Private part of the cost: –
Annual revenue: –
Total costs of the activity: –
Profit (derived): –
The whole system
Projects in parallel (derived): –
Unallocated capital: –
Total R&D and technological innovation employment: – posts
Total operating employment in steady state: – posts
Aggregate profit: –
The arithmetic of time, per average project
–
What a year of an R&D project costs; the real minimum of the portfolio is €350,000.
The R&D lasts from 1 to 3 years; revenue starts the following year, at 50%, in full afterwards.
The capital available each year; the number of projects comes out on its own (capital divided by cost, remainder declared).
How much the tax investors put in and how much the private ones; at 100% tax the private curve disappears.
Logarithmic scale from €500,000 to €1,000M; it starts at ≈€10M, the realistic median of a successful project.
From 10% (exceptional software) to 100% (growth at a loss); 80% is the midpoint between mature aggregates (Damodaran, NYU Stern) and the medians of listed SaaS companies (Benchmarkit).
How many years the charts show.
The profit and loss account of the average project in steady state, by subtraction
The recovery of the investment: treasury and private capital, cumulative position
Who it suits
Why this chain is in everyone's interest.
The private investor, because the chart shows the honest profile of the bet: years of contribution and then the returns. The treasury, because its curve returns to zero over the years and from there only adds. And Volcano, because capital is literally what we look for most: it is capital that decides how many projects run in parallel, and each project adds its own profit and loss account to the system.
The doors are in capital; the instrument, in the Tax Lease and in the Tax Lease as a means; the projects, in the portfolio; your personal number, in the tax simulation.
John F. Kennedy, 1962