The study on stage financing model of IT project investment.

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ID: 30618
2014
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Abstract
Stage financing is the basic operation of venture capital investment. In investment, usually venture capitalists use different strategies to obtain the maximum returns. Due to its advantages to reduce the information asymmetry and agency cost, stage financing is widely used by venture capitalists. Although considerable attentions are devoted to stage financing, very little is known about the risk aversion strategies of IT projects. This paper mainly addresses the problem of risk aversion of venture capital investment in IT projects. Based on the analysis of characteristics of venture capital investment of IT projects, this paper introduces a real option pricing model to measure the value brought by the stage financing strategy and design a risk aversion model for IT projects. Because real option pricing method regards investment activity as contingent decision, it helps to make judgment on the management flexibility of IT projects and then make a more reasonable evaluation about the IT programs. Lastly by being applied to a real case, it further illustrates the effectiveness and feasibility of the model.
Reference Key
chen2014thethescientificworldjournal Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Chen, Si-hua;Xu, Sheng-hua;Lee, Changhoon;Xiong, Neal N;He, Wei;
Journal TheScientificWorldJournal
Year 2014
DOI
10.1155/2014/321710
URL
Keywords Keywords not found

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