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E-ISSN : 2288-2766

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Vol.3 No.2

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Selecting Investments in Start-ups: an OWA-based Methodology

East Asian Journal of Business Economics / East Asian Journal of Business Economics, (E)2288-2766
2015, v.3 no.2, pp.21-25
https://doi.org/10.13106/eajbe.2015.vol3.no2.21.
Montserrat Casanovas (University of Barcelona)
Jordi Pla (2University of Barcelona)
Montserrat, C. , & Jordi, P. (2015). Selecting Investments in Start-ups: an OWA-based Methodology. East Asian Journal of Business Economics, 3(2), 21-25, https://doi.org/10.13106/eajbe.2015.vol3.no2.21.

Abstract

Investment process on startup companies faces several difficulties based on the characteristics of this type of companies, such as lack of historical data, current operating losses and absence of comparable companies. In this paper we focus in a new methodology based on ordered weighted averaging (OWA) operators. OWA operators are useful instruments that enable the aggregation of information; in other words, from a data set we are able to obtain a single representative value of that set. The investment methodology presented consists on the application of OWA operators to the targeted startup companies based on the capacity of cash-flow generation and also on the planned scenario of future growth for each company. This paper shows that the methodology proposed can serve as a valuable tool, complementing the qualitative criteria (which, obviously, should not be ignored) for assessing and selecting a start-up investment.

keywords
Start-ups, Investments, OWA, Uncertainty.

Reference

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East Asian Journal of Business Economics

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