Startup real options valuation under STO-based financing: a binomial–edgeworth model framed by Lean 5.0

Purpose This paper develops a hybrid valuation framework for technology startups in the circular construction sector, integrating Real Options Theory, Edgeworth-corrected risk modeling, Operational Excellence 5.0 and Security Token Offering (STO)-based financing. It aims to address the limitations of traditional Discounted Cash Flow models by capturing strategic flexibility, operational performance and alternative financing under Industry 5.0 conditions. The purpose is to provide entrepreneurs, investors and policymakers with a dynamic tool to evaluate startup projects in highly uncertain, innovation-driven and sustainability-oriented environments, particularly in Ibero-American and emerging economies. Design/methodology/approach This study adopts a conceptual and simulation-based approach. A binomial real options model is enhanced with Edgeworth expansion to incorporate skewness and kurtosis in startup return distributions. Operational Excellence 5.0 is integrated via a performance multiplier reflecting lean construction, flexible manufacturing and digital interoperability (openBIM). Financing flexibility is modeled through STO-based tokenization of future cash flows. Scenario-based simulations examine the sensitivity of strategic project value to volatility, operational efficiency and distribution asymmetry, using synthetic data sets calibrated with literature benchmarks and expert judgment. Findings Results demonstrate that strategic project value increases significantly with higher market volatility and operational efficiency, confirming the core predictions of Real Options Theory. STO-based financing consistently yields higher valuations, especially under high-volatility conditions. Skewness in return distributions has only a marginal effect compared to the dominant influence of volatility and operational performance. Startups combining lean operations, digital interoperability and innovative financing achieve the highest valuations, while pivot or reactive strategies yield limited upside. The findings emphasize the synergistic effect of external uncertainty and internal operational excellence in driving startup value. Research limitations/implications This study is primarily conceptual and relies on simulation-based data rather than empirical data sets. This limits the immediate generalizability of the results. Future research should validate the model with real-world startup data, explore machine learning integration for real-time scenario analysis and investigate the long-term effects of STO-based financing on governance and liquidity. By highlighting the role of operational excellence and non-normal risk modeling in valuation, this work extends Corporate Finance, Operations and Supply Chain Management (OSCM) and entrepreneurship literature, while pointing to the need for empirical applications in emerging and sustainability-driven industries. Practical implications For managers and entrepreneurs, the model quantifies how operational improvements – through lean processes, flexible manufacturing and digital workflows – directly enhance financial resilience and strategic value under uncertainty. STOs offer startups an alternative to traditional venture capital and debt, enabling liquidity and investor diversification. The framework supports decision-making on when to delay, expand, pivot or tokenize cash flows. It is particularly relevant for startups in emerging economies where access to conventional financing is constrained, demonstrating that combining operational excellence with financial innovation enhances growth potential and competitive positioning in volatile markets. Social implications This study aligns startup valuation with Sustainable Development Goals (8, 9 and 12) by linking operational excellence and circular construction to economic growth, industrial innovation and responsible resource use. By enabling startups to leverage digital finance and sustainable operations, the framework promotes scalable, environmentally conscious business models. It supports job creation, modular and reusable construction methods and enhanced interoperability among stakeholders, contributing to the decarbonization and resilience of urban infrastructure. Broader adoption of such strategies can stimulate inclusive economic development in regions facing both infrastructure deficits and sustainability challenges. Originality/value This paper introduces a novel hybrid valuation framework that integrates Real Options Theory, Edgeworth-adjusted probability modeling, Operational Excellence 5.0 and STO-based financing. Unlike traditional models, it captures strategic flexibility, operational performance and digital financial innovation in a unified structure. Methodologically, it advances real options applications by addressing non-normal risk distributions and embedding operational efficiency as a direct value driver. Conceptually, it bridges corporate finance, OSCM, and entrepreneurship in the context of Industry 5.0 and circular economy startups. The framework offers both academic and practical value for evaluating innovation-driven ventures under extreme uncertainty.