The largest unchartered territory on the business appraisal map is the private capital markets. These markets contain more than 99% of business entities comprising millions of companies and generate half of the gross domestic product of the United States and the world. Not only are the companies operating in these markets difficult to value, but there is no, one, unified agreed upon method of how to approach cost of capital determinations for valuation engagements. The intention of this series of papers is to take a look at how we approach cost of capital to value private companies. This first article will take a look at the practices and methods appraisers use as well as some of the problems with those methods. Article two will delve more deeply into understanding the differences in the private capital markets, clearly define the relevant financing and capital markets for privately held companies, and examine the private capital markets, including trends, current practices, and activities before concluding with a view toward relevancy.