Research On Risk Of Agricultural Hi-Tech Venture Capital

Venture capital is an innivation in the high-developed market-oriented economicmachanism with the purpose to meet the development of modern science and technology,which plays an important role in promoting the transformation from scientific andtechnological achievements to actual productivity. Venture capital is introduced from abroadin our country in 1980's,developed enough after 20 years of development, and is playing itsimportant role in many industries. But, the role of venture capital is not obvious in promotingthe transformation from agricultural scientific andtechnological achievements to actualproductivity. Acording to the statistics of Scientific and Technologic Department of theAgricultural Ministry, about 6000 agricultural high-tech achievements are innivated in Chinaevery year. But only 30% to 40% of them are transformed, which is far from the proportion ofthe developed countries which is about 70% to 80%. One of the most important reasons is thatthe risk is too high in the operation of agricultural high-tech venture capital in our country,which is retarding the development of agricultural high-tech venture capital. Therefore, thisthesis studies the major risk factors faced by the parties in the operation of agriculturalhigh-tech venture capital with the risk of agricultural high-tech venture capital as the researchtopic, the combination of standard with empirilism, micro with macro and dynamics withstatics as the research methods, in order to explorate the risk-controling-and-sharingmachinism.This thesis is composed of enght chapters according to the risk-sharing parties in theagricultural high-tech venture capital:Chapter One is introduction, including research backgroud, research prupose andsignificance, research outline and methods. And also, this chapter introduces and analysizesthe situation of researchs about risk, risk management, venture capital, and agriculturaleconomic management at home and abroad, which is the preface of this thesis.Chapter Two is about some basic theories of venture capital. In this chapter, the basicdefinitions about risk, risk management, venture capital, agricultural high-tech and itsindustrilization, and agricultural high-tech venture capital are demarcated first. Then, thegenearl procedure of risk management, the operation of agricultural high-tech venture capital,the general law of agricultural high-tech industrilization are introduces. And finially, theparties and the risk factors involved in agricultural high-tech venture capital are analysed briefly.Chapter Three is about the comparing and reference of risk management of agriculturalhigh-tech venture capital at home and abroad. It is important to refer to the advancedexperiences of the developed countries since the introduction of venture capital from abroad ismandatory system change in our country. This chapter summrizes the conditions ofagriculture, the options of technology, the experiences and lessons of risk management ofagricultural high-tech venture capital from the United State of America, West Europ, and theTaiwai Region of our country, on which four basic conclusions are drew, ie, the situation ofthe country or the region is the basis to manage the risk of agricultural high-tech venturecapital, appropriate organization is necessary in order to control and prevent risk, theagricultural high-tech industrilization needs strong support from the government, and theagricultural high-tech industrilization needs the government to take an active part in therisk-sharing.Chapter Four is about the risks faced by the investors and theire management inagricultural high-tech venture capital. This chapter first makes a summary about thedevelopment scale of the agricultural high-tech venture capital, the structure of capitalresources, the investment intensity, the industrial distribution, the stage distribution, thegeographical distribution and the devestment methods. And then it analysizes the investorsinvolved in agricultural high-tech venture capital and their investing fentures respectivelywith the conclusion that the major risks faced by the investros in agricultural high-techventure capital are risk of macro-environment, the risk of adverse selection, and the risk ofmoral hazard. In order to control and prevent these risks, investors should invest carefully,select agents cautiously before investment, and incent and constrain the agents after signingthe investment contract.Chapter Five is about the risks faced by the enterprises in agricultural high-tech venturecapital and their management. In this chapter, the two important enterprises involved inagricultural high-tech venture capital are introduced. Then the risks faced by them areanalysized respectively, and a series of risk management strategies are introduces accordingly.Especially, the real value of a venture firm should be based on its growth ang its environmentat the same time, for the unbalance of the regional economic development in our country.Chapter Six is about the risks faced by households involved in agricultural high-techventure capital and their management. Although the households don't take directly part in theoperation of agricultural high-tech venture capital, they are an important risk-sharing party.There are millions of households in our country. They have different risk preferences andattitudes. In order to prevent and control the risks, the households shoule resort to agricultural insurance, take an active part in agricultural and professional cooperation organizations, andtry their best to improve themselves.Chapter Seven is about the role of government of the risk management in agriculturalhigh-tech venture capital. Government is undoubtly a special party in agricultural high-techventure capital. This chapter first demarcates the function of government and then makes itsrole clear. The gevernment should supply policies, shoule share risk and should supervise theother parties in agricultural high-tech venture capital.Chapter Eight is the conclusions and the suggestions. It obviously comes to theconclusion that the slow development of agricultural high-tech venture capital in our countryis not only due to the low ability to prevent and control the risks they face, but also to themacro-environment which is not good engough. Therefore, the government should try its bestto make the macro-environment better, to cultivate more and competent ventrue capitalist andenterpreneurs, and to perfect the intermediary service system so as to reduce the total risk ofagricultural high-tech venture capital.