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A Study On The Decision Of Venture Capital Based On Real Options

Posted on:2006-06-08Degree:MasterType:Thesis
Country:ChinaCandidate:X P HuFull Text:PDF
GTID:2156360152489451Subject:Technical Economics and Management
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In the era of the rapid development of science and technology, science leads the economy, so venture capital action is becoming more and more popular, and venture capital projects are facing more and more uncertainty and risk. Whereas, the managerial flexibility and strategic adaptability contained in the venture capital are representing its inarguable value. Traditional investment decision methods can't make the flexible adjustment to and perform the effective management of the coming change. Thus the research on the evaluation methods with managerial flexibility is becoming the key to successful utilizing of the coming investment opportunity and adoption of effective competitive strategy in time for venture capital. A real option approach that borrows ideas from financial options theory offers a fresh perspective. Real options method views the investment opportunity of managerial flexibility as a series of options that can achieve returns on investment. It greatly breaks through the limitation and manacles of the traditional investment evaluation, adapting well to the new investment environment characterized by uncertainty and risk, and offering a revolutionary solution to quantify the managerial flexibility and strategic adaptability. The introduction of the real options approach in venture capital decision can provide a new idea of venture capital management and scientific decision, which has certain innovative meanings. On the purpose of promoting the development of venture capital, the research work is carried out around the application in the venture capital decision of real options. The paper mainly includes the following content and achievements. Firstly, the paper expounds the system structure and decision-making program of venture capital, and discusses the existing major problem in the venture capital operation based on the analysis of the development significance and current status of the venture capital of our country. Secondly, by the analysis of the high risk,high return,future uncertainty and the life period in the growing process, the limitation of the tradition investment decision method used in the decision of venture project is pointed out. Thirdly, through the discuss of the essential concept, basic feature and common option pricing theory, the common idea of establishing the option-based evaluation methods is summarized, and the applied frame of real option is constructed. Finally, on the basis of the analysis of the value constitution of the real options method in the venture capital project, the multistage and multimode compound real options is simulated, and the design of a compound model based on the multistage and triple tree is tried.
Keywords/Search Tags:Venture Capital, Real Options, Project Decision, Triple Tree Model
PDF Full Text Request
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