The Option Pricing Method (OPM) is a nuanced valuation approach used to estimate the equity value of a startup, particularly in its early stages. Drawing inspiration from financial options theory, OPM evaluates the startup as a series of call options, representing the potential for future financing rounds. The importance of OPM lies in its ability to capture the dynamic nature of startups, where future funding rounds and potential dilution are inherent uncertainties. The purpose of OPM is to provide a more realistic reflection of a startup’s value by considering the potential growth and subsequent equity issuance. This method becomes essential in early startup stages, especially in industries with high gain and innovation, such as technology and biotech, where traditional valuation models may fall short due to limited financial data and evolving business models. OPM’s adaptability to the fluid nature of early-stage ventures makes it a valuable tool, allowing entrepreneurs and investors to navigate uncertainties and make more informed decisions regarding equity allocation, funding strategies, and overall business planning. By accounting for the potential dilution resulting from future financing activities, OPM provides a more comprehensive and forward-looking perspective on a startup’s valuation, aligning it with early-stage ventures’ inherently uncertain and dynamic nature.