A Study On Corporate Governance Mechanism Of Chinese Venture Capital Company

Since China initially imported the concept of venture capital, it has involved for more than twenties. Nevertheless in terms of its development level and its contribution to either the technology industrialization or the economy, it has not entirely exerted its deserved effect. One of important reasons is China merely concentrates on importing venture capital's models rather than the internal corporate governance at venture capital company. Therefore it can not eventually resolve the conflict between its high transaction cost, agent cost and its weak incentive mechanism. This paper in theory tries to reveal the problems of corporate governance at venture capital companies in China and to bring forth the constructive advice in order to prosper the theory of internal corporate governance at the venture capital company and to benefit improving their contributions in practice.Venture capital involves three main relevant parties: venture investor, venture capitalist and venture entrepreneur, and meanwhile it relates to the agent contracts at two levels. The agency relationship with double contract causes a series of difficulties at venture corporate governance. The natures of information asymmetry and high transaction cost make more attentions on the corporate governance at venture capital companies. This paper applies to the transaction cost theory and information asymmetry hypothesis to reveal the specific characteristics of agency contract at venture capital, and it comprehensively states the theories of agency, integrated corporate governance and financial contract. This paper will form a theoretical foundation on corporate governance at venture capital companies.This paper adopts the researching method of institutional economics. It describes and analyzes the outer circumstance of venture capital in China based on its relevant policies, legal regulations, finance, social agency service and culture. At the same time it summarizes and concludes the difficulties and problems regarding micro corporate governance of venture capital. This paper puts forward this option that the whole phases of the venture capital development in China include the stage of recognition of institutional transition, the stage of institution innovation, the stage of institution improvement and the stage of institution stabilization. The problems existing in the micro corporate governance of venture capital in China relates to the...