Research On Contractual Mechanism In Venture Capital

Venture capital is a new pattern of financing system with a unique operationalmechanism and theory. There are complicate interest conflicts and several kinds ofasymmetric information between investors, venture capitalists and entrepreneurs.Therefore, this dissertation will attach importance to establish different contracts notonly between investors and venture capitalists, between venture capitalists andentrepreneurs, but also among the three of investors, venture capitalists andentrepreneurs, which can be used for reducing principal-agent costs and conflicts.Thus, the contents of the dissertation are summarized as follows.(1) An optimal contract model is set up to resolve the principal-agent problemscaused by asymmetric information using principal-agent theory and incentive theory.Even if investors cannot observe the true types of venture capitalists under the exante condition, they also can assort with venture capitals on the basis of a series ofincentive and constraint schemes provided by the model and get the optimal profits.(2) The characteristics of the venture capital limited partnership are given withrespects to incentive, constraint and monitor. An optimal contract model of thelimited partnership is set up depending on principal-agent theory. And we canquantitatively and theoretically explain the internal reasons about the successfuloperation of the limited partnership. Some kinds of organization structures arediscussed here according to the current situations in China venture capital industryand China national conditions.(3) Due to the dual moral hazard, an optimal contract model is set up betweenone venture capitalist and several entrepreneurs under the dual moral hazards. It isproved that the model have an influence not only on the effort levels of both sides,but on the investment income of the venture capitalist.(4) Under asymmetric information, the syndication is studied in the dissertation.A contract model is built to compare the management costs and actions devoted intothe venture enterprise by different venture capitalists participating in syndicationunder respective cooperation and non-cooperation. The motives of syndication andthe characters of ex ante selection and ex post management from venture capitalistsare got from a survey in China venture capital industry that covers the transverse andlongitudinal relationship between venture capitalists and the venture enterprise.(5) From a new view of team production, a team contract model is attentivelyset up between investors, venture capitalists and entrepreneurs, to coordinate theinterests of team members and to use venture capital in a virtuous cycle.