Hunter Vs. Orchard Arithmetic
Why “Eat-Today” Operators Keep Leaving Their Own Money On The Table
Corporate operators trained to build fast, spike the metrics, and sell in five treat stewardship as sentimental luxury. A headline exit delivers visible, early reward; therefore, the hunt must be superior. Yet, whenever capital researchers examine the whole economic life of a firm rather than its first sprint, the numbers invert the creed. McKinsey’s Corporate Horizon Index, which has tracked 615 US public companies since 2001, shows that organizations reinvesting beyond year five generate 47 % more cumulative revenue, 36 % more earnings growth, and (most damaging to the short-cycle thesis) 81 % more economic profit than their die-by-the-quarter peers. Even within the first five years, the long-term cohort outperforms on total-shareholder return, because markets capitalize durability with richer multiples.
Private deal data sharpens the picture. In 2024, software businesses whose net-revenue retention exceeded 120% secured a median purchase price of 11.7× revenue; the sector median was 5.6×. That spread is not cosmetic; it is the price buyers pay for verified trust value: low churn, disciplined controls, auditable financial hygiene. For a $40 million ARR company, accepting 6× today earns a congratulatory press release yet forgoes roughly $160 million the market would attribute to the same asset after two further years of disciplined compounding at the premium multiple. Here, speed is not a hedge; it is a haircut.
Nor is the headline price the operator’s real payout. Earn-outs (the favoured bridge across valuation gaps) seldom deliver. A recent study of middle-market transactions found that fewer than 60% of deals with an earn-out clause paid even a partial instalment once post-close diligence surfaced the trust debt buried during the sprint. The liquidity at signing often decays into a discounted IOU.
Capital markets have already priced the lesson. Bond investors reward reputable issuers with cheaper capital: ESG-linked corporate issues price at coupons roughly 10 basis points below equivalent conventional debt, according to 2025 OECD data corroborated by recent AAA-rated placements. Each 100-basis-point reduction in perceived risk lifts present value by about 12% before a single dollar of growth is added. The orchard, in other words, pushes up today’s valuation while the seedlings remain small.
Trust stewardship does not defer cash into a hazy future. Enterprises that implement Trust Value Management (TVM) (and, within that framework, publish their trust stories through an authenticated Trust Centre) see immediate revenue effects. One 2024 field study recorded a 74% drop in inbound security questionnaires and double-digit acceleration in enterprise deal velocity because sales teams could close business instead of litigating discounts on risk. Under TVM, the Trust Centre is simply the visible node of a larger engine: trust stories engineered to map stakeholder anxieties, metrics that quantify the value unlocked, and feedback loops that redeploy the gains. The objective is conversion: translating narrative credibility into near-term cash and feeding the data back into the Trust Value ledger that underwrites the premium multiple. Compliance alone is not TVM.
The brake, therefore, is cultural, not analytical. Compensation systems reward motion, not sustainability, so managers rationally optimise for visible speed. Yet Norges Bank Investment Management, the world’s largest sovereign wealth pool, has argued (in the Financial Times) that moving from quarterly to semi-annual reporting would lift valuations by allowing management to focus on strategy over optics. A minor redesign of operator incentives (indexing leadership bonuses to rolling five-year value per share, permitting limited founder secondaries once third-party trust audits clear, and triggering dividends or debt-recaps when free-cash margin crosses threshold) puts money in executives’ pockets while leaving the compounding engine intact.
None of this demands moral conversion. It merely asks operators to extend their incentive horizon beyond the next board deck. The market’s own pricing demonstrates that the harvest outperforms the raid. Keep the spear only long enough to find a fertile valley, then plant. Install rails that let stakeholders measure and price your trustworthiness, bank the interim liquidity disciplined stewardship unlocks, and sell only when the buyer must pay for both the fruit and the soil that produces it. Anything shorter is bravado mislabelled as acumen, and a smaller wire to your account.
Sources & Citations
McKinsey & Company: “Where companies with a long-term view outperform their peers.” Introduces the Corporate Horizon Index and the 47 % / 36 % / 81 % performance deltas.
McKinsey Global Institute: “Measuring the Economic Impact of Short-Termism.” Full PDF backing the Corporate Horizon statistics.
Software Equity Group: “2025 Annual SaaS Report.” Shows 11.7× EV/TTM-revenue median for NRR > 120 % firms vs. 5.6× index median.
SafeBase: “Reduce the burden of security questionnaires with a SafeBase Trust Center.” Cites 74 %+ reduction in inbound questionnaires from a Trust Center-first approach.
SRS Acquiom: “M&A Earn-out Provisions: What You Need to Know.” Latest data: only 59 % of earn-out deals pay anything; average payout 21 ¢ on the dollar; 28 % contested.
OECD: Asia Capital Markets Report 2025, Sustainable-Bond chapter. Documents 10- to 25-basis-point pricing effects tied to sustainability performance targets.
Financial Times: “Companies should step off the quarterly-report treadmill.” Op-ed by NBIM (Norges Bank Investment Management) urging a move to semi-annual reporting.
Harvard Business Review: “MBAs Are More Self-Serving Than Other CEOs.” Summarises research linking MBA credential to self-interested, value-eroding strategies.
Innosight: “Corporate Longevity and the Rise of Hybrid Industries” (2021 Corporate Longevity Forecast). Shows S&P 500 average tenure falling from 30-35 years in the 1970s to a projected 15-20 years this decade.
Innosight PDF: 2021 Corporate Longevity Forecast. Detailed data and charts on S&P 500 churn.