The paperexpounds theapplicationof real optionin the financing decision of startup firms in uncertainty on the theoretical basis of riskneutral pricingapproachandbinomialmodel.
Smart Technologies cofounder Jeffrey DeCoux, then only 23, had vague plans for an Internet software firm when he met Heller at a conference on startupfinancing in early 1995.
In their simplest forms, debt financing is when a startup agrees to pay back a loan with a predetermined timeframe and interest rate and equity financing is when the business sells ownership shares in exchange for funding.