Finance & Valuation
DCF
Discounted Cash Flow
A valuation method that estimates the present value of an asset based on projected future cash flows, discounted back at a rate reflecting the investment's risk. DCF is the theoretical gold standard for valuation but is only as good as its assumptions -- and for early-stage software companies, those assumptions involve a lot of guesswork about growth rates, margins, and terminal values. Use it, but don't pretend the output is precise.