Unbalanced linguistic approach for venture investment evaluation with risk attitudes

Abstract

In real-world decision problems, experts often feel more comfortable providing their knowledge and preferences via a linguistic way. In the venture investment evaluation, the venture capitalists are more sensitive to the high risk (or income) terms in the used linguistic term set. In other words, the unbalanced linguistic term sets are often used in venture investment evaluations. In this paper we present an unbalanced linguistic approach for venture investment evaluation with risk attitudes. First, by developing the unbalanced linguistic operators and unbalanced maximizing deviation method, we propose the evaluation process for this approach. Then, we integrate the risk attitudes of venture capitalists into the venture investment evaluation, and develop a novel selection process. In this selection process, the venture capitalist selects the best project(s) to invest, according to his/her risk attitudes. Finally, a practical example is given to illustrate the feasibility and applicability of the unbalanced linguistic approach for venture investment evaluation.