Research On The Theory And Decision-making Approaches Of Venture Capital

In this paper, we discuss some basic theories of venture capital, evaluation index system, evaluation methods of benefits and risks, decision-making models, which relate to the investment analysis, microeconomics, information economics, decision-making theories and methods. Some new conceptions, theories, methods are proposed, which includes five parts.1. Basic theories of venture capital. First we discuss the content of the venture capital theory, classify and compare the venture capital with common investment, broad sense investment, narrow sense investment, analyze the innovation tools of venture capital. Secondly, we summarize the three rules of high risks and high profits on venture capital, discuss high profits theories of venture capital and the risk management and control theories, propose the nuclear fusion model of venture capital. Furthermore, we study the adverse selection of asymmetric information on venture capital and moral hazards and the methods solving related problems.2. Evaluation index system of venture capital. Based on the deep anatomy of venture enterprises and venture capital, we bring forward the function model of evaluation system and evaluation diversity curves; develop a systemic and objective evaluation system. This system bases on the technology and product evaluation, focused on team management, sets the excess financial benefits as a target, emphasize the market analyses and the abilities of technology's creating market, review the growing potential of an enterprise, survival environments and risks from all aspects3. Evaluation methods of benefits and risk on venture capital. Base on the economic theory and venture theory, we study the conceptions of economic benefits, basic expression and related optimizing methods, propose and prove some autocorrelation theorems of evaluations, and build the evaluation model based on the defining the dynamic break-even point and broad-sense break-even point. We also discuss the common rules of the sensitivity on uncertain factors, study probability analyses and weigh methods of benefits and risks.4. Decision-making model of venture capital. Base on the theory of decision-making, we study the system fuzzy decision-making model, the NN model, and the synthesis evaluation model based on non-linear programming and weigh. We build the combination investment model based on multi-goals integer programming, discuss the scale of venture capital, joint investment and investment strategy of maximum utility.5. Demonstration and analyses of venture capital. Utilizing theories of venture capital, evaluation methods, decision-making models, we analyze some venture enterprises, venture investment projects and venture investment combination and withdraw some beneficial results.