Multi-Criteria Approach to Assessing the Investment Attractiveness of Innovative Projects

Realistic evaluation of the investment attractiveness of the financed project is the basis for the successful functioning of a venture investor. At the same time, investors often have to act in conditions of a severe lack of information, especially when it comes to projects at an early stage of the life cycle. In these cases, they use multi-criteria methods for assessing investment attractiveness, often also called scoring methods. The aim of this work is to develop a methodology for assessing the investment attractiveness of innovative projects at the early stages of the life cycle, both based on an analysis of theoretical approaches in the field of venture economics, and based on an analysis of existing business practices.
We have proposed a method for assessing the investment attractiveness of a project based on dividing the criteria into three macro groups (market and entry strategy, team and product). At the same time, we used a concept that allows us to interpret the value of each of the assessed parameters (seven in each macro group) as a positive or negative signal given by the project to a potential investor.
An important difference between the presented methodology and others described in the professional literature is the combination of the use of theoretical models with an in-depth analysis of the criteria used in practice by various players in the venture capital market (funds, business angels, etc.), which together form the methodological basis of the work. This combination of the use of sources of information on the criteria for evaluating projects determines the scientific novelty of the study. The practical significance lies in the possibility of applying the proposed methodology both by venture investors and other actors of the venture capital ecosystem for making specific financial decisions.

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