Real Options as a Real Option for Start-up Valuation: A Longitudinal Case Study

  • Typ:Master's thesis
  • Betreuer:

    Michael Pelz

  • Zusatzfeld:


  • The concept of real options – applying the concept of financial option pricing to investment projects where managers can delay commitment due to high flexibility and uncertainty – have been extensively discussed in academic literature. However, despite a more refined approach to valuing risky investments, real options are not well-accepted among practitioners. Nevertheless, the Robert Bosch Start-up GmbH, a German Corporate Start-up Program, took on the challenge of adopting a real option practice when it wanted to improve investment decision quality. This paper takes on a practitioner approach to selecting a real option method that is theoretically correct and simultaneously approachable for practitioner use. In a second step, the research then focuses on adapting the selected real option method to the particular challenges of start-up valuation to enhance its benefits even further. As a result, pragmatic insights about real option practice in a start-up setting has emerged, from which transferrable, hands-on learnings and recommendations for real option practice for start-up valuation are deducted.