Open AccessVENTURE CAPITALISTS DECISION MAKING: APPLYING ANALYTIC NETWORK PROCESS TO THE STARTUPS EVALUATION
Author(s) -
Maria Milkova,
О Н Андрейчикова,
А. В. Андрейчиков
Publication year - 2018
Publication title -
international journal of the analytic hierarchy process
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.213
H-Index - 3
ISSN - 1936-6744
DOI - 10.13033/ijahp.v10i1.511
Subject(s) - analytic network process , computer science , heuristics , venture capital , valuation (finance) , consistency (knowledge bases) , process (computing) , heuristic , order (exchange) , decision making , operations research , artificial intelligence , business , marketing , analytic hierarchy process , purchasing , mathematics , finance , operating system
The idea of synthesizing analytical and heuristic approaches is proposed in order to join different approaches to the Venture Capitalists (VCs) decision making. The research applies Analytic Network Process (ANP) methodology to the comparative evaluation of four e-commerce startups. The proposed ANP model represents the decision problem as a structure of Benefits-Opportunities and Risks networks with dependences and feedbacks between decision criteria and alternatives. Based on VCs judgments that are checked for consistency, the ANP approach helps choose the best startup for funding or to estimate the target startup versus other startups. The ratings that are obtained may be used as weights for determining a startups valuation. In the model, heuristics is used without reducing the complexity of the task and thus helps avoid the systematic error. Moreover, the idea of applying ANP to the VCs decision making serves to make the decision process transparent and understandable. To implement the ANP model, Multichoice software has been developed.