Ranking venture capital business plans with data envelopment analysis method: A case study of Hatef Company

Evaluation in venture capital industry is one of the most challenging issues from practitioners and researchers view. The limit time of evaluation, lack of financial data especially from ventures, heuristics and biases in evaluating and some other issues differentiate venture capital evaluation process from other investment methods. Also speed and accuracy in evaluation are two key success factors for venture capitalists. In this paper we attempt to overcome some of evaluation challenges by using several mathematical methods including data envelopment analysis (DEA), cross efficiency and VIKOR. The method is able to decrease screening time, reduce biased effects and enable group decision making under variety of weights. This method won’t need any weights as they are calculated within the model. For this purpose some interview were done and domestic criteria are extracted. The performance of the proposed model is investigated by the aid of the Hatef Company case study. Thereafter, this paper present a group of domestic criteria and a standard and mathematical method to support decision making without any need for criteria weights or normalization. The results derived from the model are similar to experts opinions about the best project but there are not adequate data to compare ranking of another projects with expert opinions.