Venturecapitalfinancingdecisionsareusuallymadebasedonthevaluationoftheventure-backedfirms,forwhichacompoundrealoptionsvaluationmodelwithtwostochasticparametersisbuiltinthispaper.Anumericalexampleisthenusedtoillustratethatthemodelgivesamoreaccurateandreliableresultthanthetraditionaldiscountcashflowvaluationmodel.