A company's value is derived from expectations regarding its future cash flows.

The financial literature found that firms' traditional valuation methods (the Asset-Based Valuation, the Discounted Cash Flow, and the market approach) do not work for startups. Read why traditional valuation methods for companies are not applied to value startup companies.

Discounted cash flow (DCF) is a valuation method used to estimate an investment's value based on its expected future cash flows.

A growth rate is a rate at which the company increases.  A high-growth company is a company in which its growth rate increases every year. E.G., 5% in the first year and 7% in the second year.

To learn more about stable growth companies and how they can fit into your investment strategy, check out our in-depth guide on selecting the right stocks for long-term growth