The Multi-phases Continuous Decision-making Model on Venture Capital Investment based on Binomial Mode of Real Options

Investment projects are subject to uncertainty about their future rewards. This makes the expenditure and income on investment projects fluctuate randomly. In order to win approving profits, rational and flexible decision should be made. However, the conventional Net Present Value (NPV) could not adapt the dynamic environment in reality. Established on accepting the conclusion that Real Options can lead to a more appropriate investment's evaluation and optimal timing by considering the flexible, dynamic and uncertain factors in investment projects, this paper constructs a multi-phases continuous decision-making model on venture capital investment based on Binomial Model of Real Options.