Multi-Criteria Analysis of Startup Investment Alternatives Using the Hierarchy Method

Entropy (Basel). 2023 Apr 27;25(5):723. doi: 10.3390/e25050723.

Abstract

In this paper, we discuss the use of multi-criteria analysis for investment alternatives as a rational, transparent, and systematic approach that reveals the decision-making process during a study of influences and relationships in complex organizational systems. It is shown that this approach considers not only quantitative but also qualitative influences, statistical and individual properties of the object, and expert objective evaluation. We define the criteria for evaluating startup investment prerogatives, which are organized in thematic clusters (types of potential). To compare the investment alternatives, Saaty's hierarchy method is used. As an example, the analysis of three startups is carried out based on the phase mechanism and Saaty's analytic hierarchy process to identify investment appeal of startups according to their specific features. As a result, it is possible to diversify the risks of an investor through the allocation of resources between several projects, in accordance with the received vector of global priorities.

Keywords: Saaty’s method; choosing alternatives; criteria composition; global priority vector; investment; multi-criteria analysis; startup.

Grants and funding

This research received no external funding.