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Development of a Methodology for Analyzing the Effectiveness of Venture Capital Investment Based on Option and Fuzzy-Sets Approaches

Author

Listed:
  • A. O. Baranov

    (Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences)

  • E. I. Muzyko

    (Novosibirsk State Technical University)

  • V. N. Pavlov

    (Institute of Economics and Industrial Engineering, Siberian Branch, Russian Academy of Sciences)

Abstract

The article is devoted to the development of a methodology for analyzing the effectiveness of venture capital investment based on the option and fuzzy-sets approaches. Venture capital financing plays a huge role in the process of innovation transition from the research stage to the production of innovative products and services. A feature of innovative projects is the high uncertainty in achieving positive technological and economic results in the course of their implementation. In this regard, in order to assess the commercial effectiveness of such projects, it is advisable to use methods that allow taking into account the uncertainty factors that affect the dynamics of project indicators. One of such methods is the apparatus of fuzzy sets, as well as an optional approach. Combining the methodology of real options with fuzzy set analysis allows, in our opinion, to obtain more reasonable results in assessing the financial efficiency of innovative projects. The article proposes the main directions for the development of a theoretical and methodological approach to evaluating the effectiveness of innovative projects financed by venture capital funds, using option and fuzzy-sets analysis.

Suggested Citation

  • A. O. Baranov & E. I. Muzyko & V. N. Pavlov, 2023. "Development of a Methodology for Analyzing the Effectiveness of Venture Capital Investment Based on Option and Fuzzy-Sets Approaches," Studies on Russian Economic Development, Springer, vol. 34(5), pages 565-572, October.
    • Handle: RePEc:spr:sorede:v:34:y:2023:i:5:d:10.1134_s1075700723050039
    DOI: 10.1134/S1075700723050039
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    References listed on IDEAS

    as
    1. Zmeskal, Zdenek, 2001. "Application of the fuzzy-stochastic methodology to appraising the firm value as a European call option," European Journal of Operational Research, Elsevier, vol. 135(2), pages 303-310, December.
    2. Geske, Robert, 1979. "The valuation of compound options," Journal of Financial Economics, Elsevier, vol. 7(1), pages 63-81, March.
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