Multiple Criteria Decision Making and Goal Programming for Optimal Venture Capital Investments and Portfolio Management

The venture capital market plays a significant role in providing capital to a new feasible business idea (new product, service, or retail concept) and businesses of different type. This chapter focuses on the way venture capitalists make their investment decision, a process involving several conflicting and imprecise criteria. We propose three different models to solve these complex decision making contexts, namely a deterministic goal programming model with satisfaction function, a scenario-based stochastic goal programming model with satisfaction function, and a fuzzy goal programming formulation. The three models have been applied to three concrete examples using real data obtained from some Italian venture capital funds. It turns out that these models are easy and simple to be implemented and analyzed, and represent an implementable approach for both scientists and practitioners.