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The Study on Stage Financing Model of IT Project Investment

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      Abstract

      Stage financing is the basic operation of venture capital investment. In investment, usually venture capitalists use different strategies to obtain the maximum returns. Due to its advantages to reduce the information asymmetry and agency cost, stage financing is widely used by venture capitalists. Although considerable attentions are devoted to stage financing, very little is known about the risk aversion strategies of IT projects. This paper mainly addresses the problem of risk aversion of venture capital investment in IT projects. Based on the analysis of characteristics of venture capital investment of IT projects, this paper introduces a real option pricing model to measure the value brought by the stage financing strategy and design a risk aversion model for IT projects. Because real option pricing method regards investment activity as contingent decision, it helps to make judgment on the management flexibility of IT projects and then make a more reasonable evaluation about the IT programs. Lastly by being applied to a real case, it further illustrates the effectiveness and feasibility of the model.

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      The structure and governance of venture-capital organizations

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        Optimal Investment, Monitoring, and the Staging of Venture Capital

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          Optimal Investment, Monitoring, and the Staging of Venture Capital

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            Author and article information

            Affiliations
            1Institute of Information Resource Management, School of Information Technology, Jiangxi University of Finance and Economics, No. 169, East Shuanggang Road, Changbei, Nanchang, Jiangxi 330013, China
            2Department of Computer Science and Engineering, Seoul National University of Science and Technology, Seoul 139-743, Republic of Korea
            3School of Business and Administration, Jiangxi University of Finance and Economics, No. 169, East Shuanggang Road, Changbei, Nanchang, Jiangxi 330013, China
            Author notes

            Academic Editor: Sang-Soo Yeo

            Journal
            ScientificWorldJournal
            ScientificWorldJournal
            TSWJ
            The Scientific World Journal
            Hindawi Publishing Corporation
            2356-6140
            1537-744X
            2014
            23 July 2014
            : 2014
            4132331
            10.1155/2014/321710
            Copyright © 2014 Si-hua Chen et al.

            This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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