ROMJIST Volume 25, No. 2, 2022, pp. 133-149
A. Chun-Yueh LIN Fuzzy AHP-based Prioritization of the Optimal Alternative of External Equity Financing for Start-ups of Lending Company in Uncertain Environment
ABSTRACT: This paper presents a novel model that applies a combination of triangular fuzzy numbers and the analytic hierarchy process (AHP) to the decision-making process to evaluate the optimal alternative of external equity financing for start-ups companies in the financial technology (FinTech) industry. First, this study develops the criteria and sub-criteria by modifying the Delphi method based on the literature review. Second, the fuzzy-AHP is used to obtain fuzzy weights of the criteria and sub-criteria. Third, the defuzzification method is used to rank the optimal alternative of the external equity financing for start-ups companies in terms of their overall weights on multiple evaluation criteria. Moreover, this study conducted a case study of lending start-ups in the FinTech industry to assess the optimal alternative of external equity financing. The results indicate that the equity crowdfunding is the optimal external equity financing alternative for lending start-ups in the FinTech industry and the costs of capital is the most important criterion for evaluating the optimal solution on an external equity financing approach. Academically, the fuzzy-AHP based decision-making theory can provide the decision-makers and administrators of the start-ups and entrepreneurs with valuable guidance for measuring the optimal alternative of external equity financing for start-ups companies in the FinTech industry. Commercially, the proposed processes which can provide support to decision-makers and entrepreneurs in start-ups companies as a valuable objective guide to measure the optimal external financing alternative.KEYWORDS: Fuzzy systems, external equity financing, peer to peer lending company, FinTech industry, start-ups, AHPRead full text (pdf)