Guide · Layer 3

Pull It Together

Written for: seed / Series A scientist-founder

Now bring the streams together into one number. Don’t present a bare figure; assemble it as a simplified income statement, built up as a levelized cost waterfall:

The levelized cost is (CRF × total capex + annual opex) ÷ annual output
The denominator is operating output — nameplate × capacity factor × time, not the nameplate rating. Divide by nameplate and you spread cost over units you never made
Lay it out left-to-right — ingredients → COGS → + capex → + opex → total cost → margin, where margin is the gap to the market price
Show it at two scales (say 100 vs. 1,000 units) so the reader sees the fixed costs dilute
Keep the three shares visible — capital, fixed opex, variable opex. That mix is your cost structure

🧭 Coach’s Read

A bare “$16k/acre” tells an investor nothing — the waterfall is what makes it believable. The number is also meaningless without its basis: state the system boundary, the capacity factor, and the CRF assumptions every time, because the most common way “we’re cheaper than X” falls apart is two levelized costs compared on mismatched bases. And keep the three shares in view — two routes at the same $/t can react in opposite directions to a price shock, and only the split shows which one is fragile.

🧭 Coach’s Read — permission to stop

The goal at this stage is justification: a number you can defend and a clear view of which one or two inputs actually move it. Pressure-testing that number — sanity-checking the cost structure against real comps and getting outside feedback — is the analytical layer’s work, Layer 4, not more polishing of this one.

🪜 Leveling Up — DCF and quote-driven capex

The single levelized number assumes one up-front spend and flat operation. Move to a year-by-year discounted cash flow when that breaks down — staged capital, a multi-year ramp, project finance with real debt and equity, or material tax and depreciation — or when a counterparty’s diligence asks for NPV, IRR, and payback. Separately, a bottom-up, quote-driven capex (real vendor quotes against a FEED study) is a tighter accuracy class than the factored estimate. Both are worth it at the right moment — and both cost weeks of effort and a pile of new assumptions without making the physics any more accurate. At the maturity anchor, CRF plus a factored capex is the right tool for the job — not a fallback.

Once the economics produce a number, the next layer pressure-tests it: Layer 4 — Analytical Layer — a sanity-check, sensitivities, and scenarios to find what moves the answer most.