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Valuating the Value and Risk of International Start-up Ventures

Author

Listed:
  • Ido Kallir
  • Tamir Agmon

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.

Suggested Citation

  • Ido Kallir & Tamir Agmon, 2015. "Valuating the Value and Risk of International Start-up Ventures," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(2), pages 203-217, April.
    • Handle: RePEc:jfr:ijfr11:v:6:y:2015:i:2:p:203-217
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    References listed on IDEAS

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    Cited by:

    1. Damiano Montani & Daniele Gervasio & Andrea Pulcini, 2020. "Startup Company Valuation: The State of Art and Future Trends," International Business Research, Canadian Center of Science and Education, vol. 13(9), pages 1-31, September.

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