Real options theory has become an accepted tool in evaluating investment decisions in uncertain environments. The application of real options in R&D strategy has somewhat lagged behind their use in the financial sector. Our goal is to adapt real option theory for use in high-technology incubation, where the environment is highly uncertain and volatile. We focus on two risk management levels: the macro (strategic) level, i.e. the management of the entire incubation fund, and at the micro (operational) level, i.e. the management of individual startups. At the macro level, a risk-matrix is the central basis for real option decision making. At the micro level, incubation-specific determinants of day-to-day startup support require an adaptation of real options to high-tech innovation decisions.