Technology valuation of NTBFs in the field of cleaner production in terms of investors' exibility and uncertainty in public policy

Technology valuation, especially in the early stages of new technology-based firms (NTBFs) growth is one of the most critical challenges, which most often hinders the investor and entrepreneur's deals during the venture capital (VC) financing process. It is clear that uncertainties arising from the likelihood of implementing public policies could significantly affect the volatility of NTBFs cash flows in the field of cleaner production. Commonly, these kinds of technologies require public supportive policies for achieving success. Consequently, their technology valuation is more challenging and traditional valuation methods are not suitable anymore because of the definitive assumption of cash flow and ignoring the investors’ flexibilities and uncertainties. Therefore, this paper proposes a method by introducing a framework based on the decision tree and the real options analysis which is tailored to meet the technology valuation of such firms during all stages of their growth. Furthermore, unlike previous papers that have utilized the compound options, option to choose has been used to apply investors’ flexibilities. Then, the proposed framework is supported by a case study, which has been conducted to verify and validate it. Finally, the conclusion section discusses the contributions and limitations of the study and provides directions for future research.