Research On Venture Capitalists' Investment Valuation Criteria Order And Their Performance

Venture capitalists'activities are to let financial capital smoothly and effectively flow into innovative high-tech start-ups. If this process works, there will be a fast development of high-tech inventions and high-tech industries. The process to choose and the criteria used to choose the high-tech start-ups and their effect on investment performance are the focal point of this research.This research uses analytical hierarchy process to sort investment criteria base on the relative importance to venture capitalists, and uses these weight vectors to find cause-effect relationship with their investment performance.This research finds different weight vectors of venture capitalists according to their investment area and their investment performance. Those are found, (1) In Great China area, venture capitalists recognize these three criteria are most important: Managerial abilities of management team, Market growth, and Teamwork of management team, (2) In Taiwan area, venture capitalists recognize these three criteria are most important: Managerial abilities of management team, Technology level needed compared with abilities of entrepreneur team, and Market growth, (3) In Mainland China, venture capitalists recognize these three criteria are most important: Managerial abilities of management team, Commitment of management team, and Market growth. And this research uses four performance indexes to find weight vectors of these performance groups of two area. And then this research uses the distance between two weight vectors to measure dissimilarity of two vectors, and progresses cluster analysis based on the distance measure, and finally find that weight vectors of two area are really in different groups.This research use basic regression method, stepwise regression method, and joint variable method to find the cause–effect relationship between these variables within and outside VC industry, and weight vectors, and VCs'investment performance, and get some effective models. Finally this research uses decision tree method to build decision trees and find the decision paths from those independent variables to investment performance. This research uses classification and regression tree method and fully grown tree method to build decision trees and gets split points.