Valuating the Value and Risk of International Start-up Ventures

Ido Kallir and Tamir Agmon

International Journal of Financial Research, 2015, vol. 6, issue 2, 203-217

Abstract: Fair value depends on an estimate of the both cash flow and risk, which is not an easy task when valuing startup firms. We present a measurement instrument for the future risk of small and risky firms that follows the major propositions in accounting and finance. It differs from other valuation instruments in looking simultaneously at the assets and liabilities. We test the VBB as a measure for value over time by using a database of VC backed innovative companies that oridary DCF valuation fails to capture their value. We show that the VBB is an effective way to capture the dynamics of the value of high risk firms.

Keywords: fair value; valuation; capital structure; simulation; venture capital (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:6:y:2015:i:2:p:203-217

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