Valuation of start-ups: A behavioral and strategic perspective

The aim of this research is to propose a methodology for the valuation of start-ups,incorporating prospective and behavioral factors with traditional risk analysis. Theproposed methodology is useful for the entrepreneur to undertake their new businesswith their own capital as well as in the case that angel investors are involved. The mainfinding is that it is possible to build a consistent methodology that makes entrepre-neurs conscious of their cognitive biases, allowing them to value the business idea witha multidimensional approach. It is important to consider that the values assigned tothe parameters of the critical variables, by scenario, must be feasible and reasonable,since otherwise it could fall into a possibility of unattainable results. The resultingmethodology represents an alternative that integrates motivational and strategic as-pects, becoming a useful tool in the decision-making process of the entrepreneur aswell as for angel investors, bridging the gap between their valuations.