Investigating the relative financial performance of Venture Capital Firms with objective modified TOPSIS approach

Bachelorarbeit , 2013 , 23 Seiten , Note: 2,0

Ingenieurwissenschaften - Wirtschaftsingenieurwesen

Venture Capital Firms (VCFs) are agents boosting the process of technology commercialization. They provide young and technology-oriented companies with private equity for a long term. Furthermore, they manage the Venture Capital funds and provide portfolio companies with managerial support. To date, there has not been utilized an adequate analytical model that simply, effectively and objectively measures the VCF's corporate financial performance in comparison to their competitors. In this analytical study we make use of the modified TOPSIS with objective weights (mTOPSISow) (Deng et al., 2000) for inter-company comparison of VCFs to evaluate their relative corporate financial performance and to identify influential Financial Performance Indicators (FPIs). Furthermore, we test and apply mTOPSISow on a sample of five large German VCFs. We come to the result that there is a high discrepancy regarding to the performances of the examined VCFs. Every VCF is geometrically more or less far away from a potential top achievement. Three out of four FPIs are nearly equally important for the final result, whereas one FPI is not influential. Consequently, this study is useful for individual VCFs to identify their relative financial performance and areas of improvement in an objective and simple way.

Content

ABSTRACT

1. Introduction

2. Literature Review
2.1 Measuring the financial performance of VCFs
2.2 MCDM methodologies and their application on the Venture Capital System
2.2.1 Technique for Order Preference by Similarity to Ideal Solution (TOPSIS)
2.2.2 Modified TOPSIS with objective weights

3. Methodology
3.1 Modified TOPSIS with objective weights
3.2 Choice of Financial Performance Indicators (FPIs)
3.2.1 Profitability
3.2.2 Asset management
3.2.3 Liquidity
3.2.4 Debt management

4. Testing the methodology
4.1 Application
4.2 Results
4.3 Discussion

5. Conclusion

Appendix

References

• Hochschule: Karlsruher Institut für Technologie (KIT)
• Note: 2,0
• Autor: Kevin Rudolph (Autor:in)
• Erscheinungsjahr: 2013
• Seiten: 23
• Katalognummer: V300019
• ISBN (eBook): 9783656972112
• ISBN (Buch): 9783656972129
• Sprache: Englisch
• Schlagworte: Venture Capital Firm, Financial Performance Indicator, TOPSIS, Multi-Criteria Decision Making (MCDM), Statistical Dependence