The Research On The Government Function On Venture Capital

Venture Capital plays an important role in enterprise' growing, which promotes the development of high-tech industry and economy of one district or one country. To begin with the conception of Venture Capital, this article made detailed analysis and exposure on Venture capital in various respect. By analyzing the practice in developed countries particularly in United States. We could discover the successful experiences and the lessons about the failure. Furthermore, we analyzed with theory the government function in market economy, including the governments' role ,target , function ,and the function transformation under the new situations such as carrying out market economy and China's entering WTO ,to find the true reasons that the government "what to do "and "what not to do ".The practice in China has existed over ten years, which has much problems .Among them the government's becoming the main body of capital is a fault ,because it restricts the Venture Capital' normal and healthy development. We analyzed the reasons and jeopardize about it, and regarded it is necessary to create the Venture Capital system. At last we make a research on how to make the government play an important role in developing Venture Capital, including the precise time the government finance enters it , how to define the main body of capital and way the government exert its function ,and the means the government uses.The appearance of new situation such as the transformation from the planned economy to market economy and China' entrance to WTO, make higher request on government functions; and how to make it develop smoothly, it is a new problem for various governments under new situations. With theory this article combines the experiences and lessons on Venture Capital in developed countries with the problems in China, and leads our countries to change its functions from the main body of capital to policy -maker, and market environment builder, and further to standardize government behaviors, exert its role effectively in venture capital, so that all can promote our high-tech and economy's development.