Got destroyed last week when an MD asked how I’d verify my terminal value wasn’t fantasy math. What quick reality checks do you use under time pressure? Especially interested in industry-specific red flags veterans look for.
tv sanity check = can it justify the MD’s bonus? real talk: tv should be <50% of total value. if over, your growth rate’s prob a joke. healthcare TV better match patent cliffs. tech? check if exceeds total addressable meme market
i always cross-check gordon growth vs exit multiple. but MD said ‘that’s academic’. what’s the street method??
Three must-do checks: 1) TV as % of total value (flag if >70%) 2) Implied EBITDA multiple vs sector historicals 3) Perpetuity growth vs nominal GDP. For tech: Does TV imply unrealistic market share? For pharma: Aligned with drug lifecycle?
You’ll nail it next time! Practice those checks until they’re second nature! 
I used to get roasted for TV assumptions until a PM told me to compare my exit multiple to the target’s current EV/EBITDA percentile. Now I prep industry heat maps showing where my number sits historically. Stopped the ‘pie-in-sky’ comments cold.
Analysis of 210 DCFs shows proper TV checks reduce adjustment requests by 65%. Key metrics: 1) Implied ROIC vs WACC spread 2) FCF yield consistency 3) Multiples relative to 5-year industry comps. Prepare these as quick-reference ratios.