Abstract
Venture capitalists (VCs) have long been preoccupied by the issue of selecting a promising start-up firm, whereas, ranking the available start-up firms is an effective way to solve this issue. In this paper, the PROMETHEE is chosen to be the fundamental ranking method. Also, the hesitant fuzzy linguistic term set is a suitable tool to simulate VCs’ evaluation information. Additionally, as the deepening of social division of labor and specialization of individuals, group decision making is famous for improving decision-making quality. Moreover, in the decision-making process, VCs exhibit behavioral characteristics which is depicted well by prospect theory that VCs are risk averse for gains and risk seeking for losses and rely on the transformed probability to make their decisions rather than unidimensional probability. Thus, a group prospect PROMETHEE with hesitant fuzzy linguistic information is constructed for VCs to make a better decision. Then, the proposed method is applied to rank start-up firms and the comparative analyses are made as well. It confirms that the group prospect PROMETHEE is better in describing the common behavioral characteristics of VCs and in enhancing the quality of evaluation.
Highlights
In order to transform economic structure and improve the graduates’ employment rate, the mass entrepreneurship and innovation is highlighted by the government of China
The VC is usually operated by venture capitalists (VCs) and there are some steps for the VCs to successfully fund a start-up firm
Because the key point of this paper is to explore the bounded rationality of VCs, the prospect theory (PT) is reviewed firstly
Summary
In order to transform economic structure and improve the graduates’ employment rate, the mass entrepreneurship and innovation is highlighted by the government of China. Numerous start-up firms born in entrepreneurship and innovation are of new technology, high risk and potential high revenue, which need the help of capital. Venture capital (VC), as the distinctive type of financing start-up firms for the sake of obtaining. The above-average revenue in the circumstance of high uncertainty, becomes a popular tool for start-up firms to acquire capital and has already caught exceptional prominence in the society. The VC is usually operated by venture capitalists (VCs) and there are some steps for the VCs to successfully fund a start-up firm. The detailed assessments for the optional start-up firms appear to be a important issue. In the process of detailed assessments, there have been some criteria used by the VCs to make an overall judgement, such as the comprehensive quality of management team, the market opportunity, the product/service differentiation and the financial situation
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