Valuation model using a mixed real options method: a review on Singapore and Indonesia digital startups

DOI

10.2991/insyma-19.2019.3How to use a DOI?

Keywords

startups, valuation model, DCF, real options, risk analysis

Abstract

Startup is drawing a lot of attention given the growth potential for both entrepreneurs and investors. One of the important aspects of this venture is a fair valuation for both parties. Traditional valuation model such as Berkus comparison methods, risk factor summation, and even the usual Discounted Cash Flow (DCF) cannot address dynamic venture such as digital startups. It is because unlike traditional firms, there is no easy way to forecast cash flow in the initially loss-making company with no or limited financial data such as revenue or EBITDA. This paper is addressing potential applicability and issue with Real Options methods given its flexi- bility nature to adapt to many scenarios that are typically faced by a digital startup. Startups information from Singapore representing more mature developed country will then empirically be compared with data from Indonesia digital startups. The benefit of this article is to provide a better structured and scientific approach in valuing a digital startup given its dynamic and high uncertainty nature of it.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Deny Rahardjo
AU  - Mr. Sugiarto
PY  - 2019/03
DA  - 2019/03
TI  - Valuation model using a mixed real options method: a review on Singapore and Indonesia digital startups
BT  - Proceedings of the 16th International Symposium on Management (INSYMA 2019)
PB  - Atlantis Press
SP  - 9
EP  - 12
SN  - 2352-5398
UR  - https://doi.org/10.2991/insyma-19.2019.3
DO  - 10.2991/insyma-19.2019.3
ID  - Rahardjo2019/03
ER  -