| Venture Capital is a new pattern of capital management system, which tremendously improved technological revolution and led the society to a Knowledge Economics era. The author mainly discussed the VC mechanisms and functions in three key themes in this article: first, legal analyzing on VC organization; second, studying VC legal behavior; third, discussing VC withdrawal method. Taking Venture Capital dramatic growth in the past two decades into consideration, we can sum up that Venture Capital, which have recuperated the vices of capital market and implied the requirement of New Economics, is an omnibus product of technique and market. Meanwhile, the development of Venture Capital needs the protection of integrated and completed legal institution in market. There have three legal structures, corporation, limited partnership and venture capital fund, which can contribute to Venture Capital. Each has his sole range. Similarly, Venture Capital's legal behavior involving correlative rights and obligations between investor and Venture Capitalist, Venture Capitalist and venture-backed entrepreneur. The best withdrawal method for Venture Capital is to enlist in the second board of stock market. From the analyses above, the author drew the conclusion that a feasible legal system is the fundamental element for the boom of venture capital in China.
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