A study on the performance evaluation system of Internet venture business

Riding on the wave of the information technology revolution, a slew of internet venture businesses (IVB) came into being. Hence, one of the recent developments in Korean capital market has been the proliferation of IVB, which is in accordance with the worldwide trend of ‘new economy’. Although the fair valuation is crucial for the nourishment of IVB, it is difficult to apply traditional valuation methods to these firms without reservation. It is due to the facts that most venture firms have little record of performance, grow unprecedently fast, and have highly uncertain future. The main purpose of this study is to suggest performance evaluation system of IVB and to develop KPI (Key Performance Indicators). Our empirical study is based upon Kaplan & Norton's Balance Scorecard (BSC) approach. Specifically, our research has been conducted by the following two subsequent procedures: Firstly, seven internet venture firms have been selected and their executives have been interviewed by FGI (Focus Group Interview) method. Based upon these results, performance indicators have been developed. Secondly, by using the above mentioned BSC items (i.e., financial perspective, customer perspective, internal perspective and innovation & learning perspective), questionnaires have been constructed and sent to IVB through e-mail as well as by fax. Among the collected 110 samples, 106 reliable samples have been used to build BSC model and to draw our conclusion. In the future study, it would be much better to consider the role of strategy in IVB and the causal relationships among Key Performance Indicators of BSC.