| ECONOMIC AND PUBLIC MANAGEMENT |
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Start-ups valuation predicted by fuzzy real options theory |
| ZHENG Zheng, ZHU Wuxiang |
| School of Economy and Management, Tsinghua University, Beijing 100084, China |
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Abstract Key parameter interval changes are used to quantify start-ups uncertainty and to deduce the discounted cash flow (DCF) and a compound real options model based on fuzzy theory. This research shows that the fuzzy real option method improves the DCF by giving the range of values with a fuzzy uncertainty to make more reasonable valuations. The fuzzy parameter sensitivity analysis shows that the start-ups uncertainty negatively correlates with the probability, the minimum value positively correlates with the left width, and the maximum value positively correlates with the right width. Analyses of the start-ups values for different situations can improve the investment decision accuracy. A case study further verifies the effectiveness of the fuzzy real options method in multi-stage investments for start-ups.
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| Keywords
fuzzy theory
real options
start-ups
valuation
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Issue Date: 16 January 2019
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2019,
Vol. 59
