WHAT FACTORS THAT ATTRACT VENTURE CAPITAL AND ANGEL INVESTOR FUNDING: CASE OF INDONESIA THESIS In partial fulfilment of the requirements For the Degree of Master of Science in Management From Institut Teknologi Bandung By ABRORI AHMAD NOOR ESA Student ID: 29019026 (Master Program of Science in Management) INSTITUT TEKNOLOGI BANDUNG 2023 i ABSTRACT WHAT FACTORS THAT ATTRACT VENTURE CAPITAL AND ANGEL INVESTOR FUNDING: CASE OF INDONESIA By ABRORI AHMAD NOOR ESA Student ID: 29019026 (Master Program of Science in Management) This research aims to understand the factors that influence venture capital investment decisions in startups and create a model for making these decisions. The Analytic Hierarchy Process method was used to gather data from venture capitalists and investors. To design a decision making concept model, this study examined various factors considered in venture capital and investors decision on an investment based on previous significant studies and employed 16 evaluation items centered on four areas —entrepreneur, product and service, market, and finance. The results concluded that the product/service sector was the most important area, with value of product being the most important factor. Followed by entrepreneur sector with business compatibility being the second most important factor . This research conduct survey based on sample from Indonesia. Conclusion of this study is expected to help venture capitalist and investor to make better judgement on startup fundings. Keywords: Venture Capital, Investing, decision-making, factor determinants, startups, analytical hierarchy process, Indonesia. ii ABSTRAK FAKTOR-FAKTOR APA YANG MENARIK MODAL VENTURE DAN ANGEL INVESTOR MENDANAI: KASUS INDONESIA By ABRORI AHMAD NOOR ESA Student ID: 29019026 (Program Studi Magister Sains Manajemen) Penelitian ini bertujuan untuk memahami faktor-faktor yang mempengaruhi keputusan investasi modal ventura pada startup dan membuat model untuk pengambilan keputusan tersebut. Metode Analytic Hierarchy Process digunakan untuk merancang metode pengambilan keputusan pemodal ventura dan investor. Pengambilan data menggunakan survey berbasis wawancara dan kuisioner. Model konsep studi ini menguji berbagai faktor yang dipertimbangkan dalam modal ventura dan keputusan investor atas investasi berdasarkan studi signifikan sebelumnya dan menggunakan 16 item evaluasi yang berpusat pada empat bidang —kewirausahaan, produk dan layanan, pasar, dan keuangan. Hasilnya menyimpulkan bahwa sektor produk/jasa merupakan bidang yang paling penting, dengan nilai produk menjadi faktor yang paling penting. Diikuti oleh sektor wirausaha dengan kesesuaian usaha menjadi faktor terpenting kedua. Penelitian ini melakukan survei berdasarkan sampel dari Indonesia. Hasil dan kesimpulan dari studi ini diharapkan dapat membantu para venture kapitalis dan investor dalam menentukan pendanaan startup. onsidmost important factors that determine which startups to fund. Kata Kunci: Modal Ventura, Investasi, pengambilan-keputusan, faktor penentu, startups, analytical hierarchy process, Indonesia. iii VALIDATION PAGE WHAT FACTORS THAT ATTRACT VENTURE CAPITAL AND ANGEL INVESTOR FUNDING: CASE OF INDONESIA By ABRORI AHMAD NOOR ESA Student ID: 29019026 (Master Program of Science in Management) Institut Teknologi Bandung Approved Date ………………………. Supervisor ______________________ Dr. Yunieta Anny Nainggolan, S.E, M.Com., Ph.D. iv THE GUIDANCE FOR USING THE THESIS Unpublished masters’ thesis is registered and available in the Library of Bandung Institut of Technology, and is open for public, provided that the author owns the copyright in accordance with the intellectual property rights that are applicable in the Library of Institut Teknologi Bandung. Bibliographical references are allowed to be use in a limited manner, however the citation and summarization can only be proceed upon the author’s permission and must include the scientific norm of stating this thesis as the source. This thesis has to be cited as: Noor Esa, Abrori. (2023): What Factors That Attract Venture Capital And Angel Investor Funding: Case of Indonesia, Masters’ Thesis, Institut Teknologi Bandung. Reproduction or publication of parts or whole of the thesis must be under the consent of the Head of Graduate School, Bandung Institute of Technology. v DEDICATION PAGE This thesis is dedicated To my parents Yufie and Edi, whom gave initial support financially and morally. To my beloved wife, Nursiwi, for unrelenting support and evergreen unconditional love. To my mother-in-law, for understanding every situation and condition I faced. To all my family, brother and sister Noor Esa Bunayya, for always believed I will overcome the obstacle to achieve this. My greatest honor and fortune for being part of your life. Fortuna favi fortus. Fortune favors the brave. vi STATEMENT OF AUTHORSHIP I hereby declare that I am the sole author of this thesis and to the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made. I further declare that this thesis has not been previously submitted to obtain a degree at this or any other higher education institution.