Research On The Selection Of Project Evaluation Criteria Of China’s Venture Capitalists

The research of venture capital and related issues has becomes one of the hottest issues of the research in financial management field in recent years. In China, it has made great contribution to the innovative high-tech enterprises and their business development. If running smoothly, it will be conducive to the development of the technology inventions of the high-tech enterprises and the enterprises themselves healthily and rapidly. The most important aspect is to decide to invest or not by evaluating investment projects based on the evaluation criteria when venture capital organizations select specific projects. Essentially, the process of choosing projects is just that of guiding the social capital to the best yield enterprise effectively, and the evaluation criteria and the selection are the main contents of this topic.This dissertation focuses on the study of the selection and sort of project evaluation criteria of China’s venture capitalists. In this dissertation, venture capital project evaluation criteria system is studied deeply based on the careful analysis of the development process of China’s venture capital and the research of related topics, meanwhile the criteria system is proposed based on theory and the analysis and discussion of the interviews when China’s venture capitalists select projects.The system includes five one-layer-criteria which are management team, technology and products, market and competitive environment, financial assessment and the related criteria of project transactions, and each includes four two-layer-criteria.Based on the criteria system already built, a relatively large number of questionnaire-based data are collected with taking the start-up and maturity data as the objects respectively. With Analytical Hierarchy Process and Fuzzy Analytic Hierarchy Process as the main tools for data analysis, this dissertation gets the importance ranking conclusion when China’s venture capitalists select projects using venture criteria.Reliable data analysis shows that venture capitalists consider the management team as the primary criteria for start-up and mature enterprises and project selection. For start-up enterprises, venture capitalists considered the second most important criteria are the technology and products which are relatively least important for the mature ones. The related criteria of project transaction process are relatively least important for the start-up enterprises, while third most important for mature enterprise. That financial assessment criteria are the second most important criteria for mature enterprises, however putted in the third place by start-up enterprises, reflects the profit-driven nature of the capital. For start-up and mature enterprises, market and competitive environment criteria are ranked in fourth place.The innovations of this dissertation are mainly reflected in the theory modeling and the application of quantitative analysis methods. The innovations of the theory modeling includes:(1) adopting semi-structured interviews to establish the fundamental theory models;(2) the introduction of a variety of analytical methods and the comparison between them;(3) dynamic adjustment of theory model based on the different development stages of venture enterprises. The innovations of the quantitative analysis methods includes:(1) applying Analytical Hierarchy Process on the evaluation results of the experts group for quantitative analysis;(2) introducing Fuzzy Analytic Hierarchy Process into the study of venture capital evaluation criteria;(3) making a comparative study between Fuzzy Analytic Hierarchy Process of fuzzy mathematics and general analytic hierarchy processes;(4) it can be used as a reliability analysis of research findings, if get just the same results by adopting different quantitative analysis methods in the study of a problem.At present, the study aiming at venture capital, especially the selection of project evaluation criteria is still at the elementary stage. It can be predicted that the classic mathematical methods, fuzzy theory, gray theory, and many other non-classical methods will be applied extensively and deeply in future study and practice of venture capital field in China. Overall, venture capital is typical system engineering. The whole process, dynamic and controlled system theory model, should be established which will play a more effective support role in the correlation decision-making of China’s venture capitalists in future study.