Abstract: Compound option is different from the simple option. It is option’s option. In realities, a lot of technologyproject invest by phases to avoid the risk. Then every stage includes many choices, these choices can be called options. Since the values of option interact with each other, so that the option should be called a compound option. A technology project model is set up based on a compound option. And a real example is used to introduce how to evaluate project with compound option. It is found that the evaluation of technologyproject which invest by phases with the compound option is better for discovering the real value of project, and is good for the scientific management of the project.

Key words: invest by phases, technology project, compound option