There are several factors these investors will account for. Most valuation professionals use Ibbotson’s SBBI Valuation Edition for RF, ERP, IRP, and SP. The CSP is the more subjective topic open to negotiation between buyer and seller. The cost of equity (K) is equal to the sum of the following discount factors (excluding risk-free rate, all figures vary by industry and business):
The conclusion here is that investors will likely require rates > 20% to buy or invest capital into a small business.