The potential of a Multi Criteria Decision Analysis (MCDA): does it improve the measurability and accuracy of the human capital evaluation in the venture capital decision process

Abstract

The current state of literature has provided lots of insights on the evaluation of ventures in the decision process of potential investments by venture capitalist, yet the measurability and accuracy of human capital evaluations remain low and in-depth knowledge is lacking. Disappointed by this absence, this study seeks to gain an understanding of the measurability and the low accuracy of human capital evaluations, to offer insights on the improvement. The researcher does this via the development and application of a human capital evaluation model, using the Simple Multi Attributed Rating technique. A technique which falls under the theory of Multi Criteria Decision Analysis, which has the potential to improve the measurability and accuracy of human capital evaluations. The result of the case study shows a small improvement on the accuracy of the human capital evaluation, through the use of the developed model, whereas it describes the recommendations for further improvements. Additionally, the research concludes upon the improvements of the measurability of human capital evaluations compared to the current state of literature, using qualitative measures.