The DCF model is crucial for entrepreneurs for several reasons:
- Valuation: It provides a comprehensive valuation method to assess the worth of a new business idea or startup. - Investment Decisions: Entrepreneurs can use the DCF model to evaluate the attractiveness of potential investments and make data-driven decisions. - Negotiations: It serves as a strong basis for negotiating with investors and securing funding by demonstrating the financial potential of the business. - Strategic Planning: The model helps in strategic planning by forecasting cash flows and identifying key drivers of value.