Innovation accounting enables apples-to-apples comparisons between two or more startups, in order to evaluate which is most worthy of continuing investment. This is a way of seeing a startup or innovation project as a formal financial instrument, an “innovation option”3 if you will, one that has a precise value and reflects a range of future costs and financial outcomes. Innovation accounting is a system for translating from the vague language of “learning” to the hard language of dollars. It puts a price not just on success but also on information.
