A Study Of Venture Capital Project Comprehensive Evaluation Model And Application

Evaluating investment project is the most important procedure(stage) during the whole operation and management process of venture capital investment. The evaluation outcome will allow venture capitalist to make final investment decision based on the quality, risk and valuation of the project. Just because this step is so critical that make it essential to establish a standard & complete checklist and make accurate evaluation for a successful selective investment among many attractive projects. However, due to a short history and lack of experience of Venture Investment in China, current project evaluation system and practice is not well designed for most local VC to make objective and precise evaluationThrough study the key advantage and disadvantage of current evaluation methods, pointing out and analyzing typical problems such as over-emphasizing risk factors, ignoring other key issues for objective evaluation, the author is tried to upgrade current project evaluation system by designing or recommending a more reasonable, scientific and effective evaluation procedure. It conclude that it is a development trend to seek a balance between risk evaluation and maximize return on investment based on basic rule and principle of venture investment business.This paper discusses the evaluation system, a key issue in venture capital, of venture capital companies with qualitative and quantitative methods on the basis of the decision-making of venture capital project featuring with a balance between returns and risks. It analyzes the primary influential factors such as comprehensive returns, technology and market risks, specially the evaluation factor of "human" according to the core competence assessment and factor analysis, as well as their influence on the success of venture capital operation, and then establishes a multi-objective evaluation system combined with returns and risks for venture capital evaluation, meanwhile, the evaluation result is processed with mathematical methods such as Delphi Method and Weighted Mean to improve the objectivity and operability. It also builds a practical evaluation model through designing the ratio of each evaluation index as well as balancing the returns and risks comprehensively for the reference of venture capital organizations in their decision-makings.