Assessing a venture capital institution’s preference model using multicriteria analysis

The paper provides a methodology which allows venture capitalists to structure their evaluation model, in light of their policy and their own criteria. An application concerning a French financial institution is also presented. The multicriteria software MINORA which is mainly applied to ill-structured decision problems, is used for this purpose. It is based on the iterative and interactive use of an ordinal regression method. First, the paper presents a review of the literature on the venture capital decision process and modelling. Then the evaluation and selection problem of firms by the French venture capital institution is studied. The paper concludes with a comparative analysis of the results of this application and those derived from previous empirical studies.