This study examines how risk evolves in private, venture capital backed companies. It finds that the stochastic Ito processes assumed for public companies probably apply to young, private companies as well. However, the parameters, drift rate and standard deviation, are generally higher. Venture...

This paper presents a new method for valuing early stage ventures, a method which views new ventures as multi-stage call options. It examines the traditional methods for valuing such ventures--the ubiquitous Discounted Cash Flow (DCF) Method using a risk adjusted discount rate, and the Venture...

In 2005, the CEO of Wind Resources, Inc. needed to value the redevelopment rights on an easement to a promising wind farm site. A consultant's discounted cash flow analysis valued the easement at $13 million, but the CEO wondered if the ability to defer development for as long as three years in...