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Journal of Business Valuation and Economic Loss Analysis

Editor-in-Chief: Ewing, Bradley T. / Hoffman, Jim

CiteScore 2017: 0.32

SCImago Journal Rank (SJR) 2017: 0.160
Source Normalized Impact per Paper (SNIP) 2017: 0.622

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Risk-Based New Venture Valuation Technique: Win-Win for Entrepreneur and Investor

Whittington P. Vara
Published Online: 2013-05-14 | DOI: https://doi.org/10.1515/jbvela-2013-0007


Abstract: New ventures that lack a financial history and have a future that is not only unknown, but may be unknowable pose unique problems to the investment community. Since conventional valuation techniques do not work in these cases, entrepreneurs and investors resort to techniques that rely more on art than finance. Although a reduction in information asymmetry usually leads to an agreement between two parties, the methods the entrepreneur or investor use to value a new venture tend to increase this information gap. The author proposes a logical, systematic risk-based new venture valuation technique that reduces information asymmetry during this process.

Keywords: valuation; investment; start-ups; venture finance; real options


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About the article

Published Online: 2013-05-14

Citation Information: Journal of Business Valuation and Economic Loss Analysis, Volume 8, Issue 1, Pages 1–26, ISSN (Online) 1932-9156, ISSN (Print) 2194-5861, DOI: https://doi.org/10.1515/jbvela-2013-0007.

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