Identifying and Prioritizing Factors Affecting Innovation of investee companies from the Perspective of Venture Capitalists: A Case Study

Innovation is one of the vital success factors of new SMEs. Venture capital can promote innovation of investee firms. The aim of this paper is identifying and prioritizing factors affecting innovation of investee firms. Initially, by reviewing the literature, 18 factors extracted. Then by statistical analysis six factors with less importance were removed. The 12 factors with more importance advanced to final step, which was Fuzzy DEMATEL to be prioritized. Results demonstrate that the most important factors are respectively: providing valuable information from the industry, cooperation and contact with the industry activists and informing about the possible threats and opportunities. The findings of this paper provide key insight in alternative investment which is a novel area in Iran’s emerging financial markets, in other words, it can support both sides of a venture capital investment process to know which factors are of more importance to boost the possibility of success.