SBC can be super esoteric, but a deep dive on investor usage of FCF as a % of FCF/Revenue/Market cap vs % dilution vs DCF and bonus SBC Adjusted Rule of 40 for Software
I dug into dilution and SBC about 8 mo ago as well and would love to swap notes. My main takeaway was similar in that most investors don't know how the heck to account for it and there is not a universal best practice. Incorporating into a DCF and modeling out FDSO and then backing out FCF / share seemed liked the best method and most practical but was still wild to me that something you would think every smart investor should have a good grasp on was widely misunderstood.
I dug into dilution and SBC about 8 mo ago as well and would love to swap notes. My main takeaway was similar in that most investors don't know how the heck to account for it and there is not a universal best practice. Incorporating into a DCF and modeling out FDSO and then backing out FCF / share seemed liked the best method and most practical but was still wild to me that something you would think every smart investor should have a good grasp on was widely misunderstood.