Harvard Business Review

MARCH 27, 2014

The operative question for them is, not “How confident am I that this investment will yield a positive return?” Ideas with positive discounted cash flows get investment. Five produced positive returns, two broke even, and three lost a little, but not a catastrophic, amount of money. Those that don’t, don’t.

Venture Capitalist 9

Venture Capitalist Discounted Cash Flow Parcell Project 9

Harvard Business Review

MARCH 29, 2018

Despite a one-year payback period and a highly positive net present value (NPV) from this investment, the department will often reject the attractive opportunity. Consider the opportunity to raise spending in Year 1 by $100,000 to acquire technology that would decrease spending each year thereafter by $100,000.

Budgeting 8

Budgeting System Innovation Payback Period 8

Harvard Business Review

JUNE 8, 2018

However, many investors seem to have concluded that the most successful companies with tens of billions of dollars of valuation today could never have justified their valuation at the start of their operation based on discounted cash flow. Investors are paying more attention to ideas and options than to earnings.

Report 8

Report GAAP Net Present Value CFO 8

Harvard Business Review

SEPTEMBER 27, 2013

Investors’ core valuation methods ( comparables and discounted cash-flow analysis) both extrapolate past performance into the future — but they fail to predict when the future will be radically different from the past. As a result, outlooks are more likely to be positive or mixed.

Innovation 8

Innovation Marketing Disruptive Innovation Discounted Cash Flow 8