A Study On Venture Capital Mechanism In China

Being a new investment model, Venture Capital is put by professional financier into enterprise which is new emerged and developing rapidly and of great competition potential. Venture Capital plays an important role in economic and social development, it promotes the transform of technologic achievements into practice and the development of middle and small high-tech enterprises.lt also promotes the economic structure readjustion and economic continual growth.Venture Capital is also a new kind of investment which is different from the traditional one in many aspects. Now the argument on Venture Capital is mainly about the macroscopic operation environment. This paper has paid more attention to themicrocosmic operation part-operation mechanism and made argument and analysis onhow to realize the well operation of Venture Capital. Some methods have been put forward to how to improve the Venture Capital operation mechanism based on the present Venture Capital conditions and characters and problems in China.The paper is made up of four chapters. The first chapter expound the Venture Capital's connotation and function and characters. The second character explain and analyze deeply the five operation mechanism component which are financing mechanism, organization form, selection and evaluation of the target, exit mechanism. The lately Venture Capital development in foreign counties have been introduced.The third chapter analyze the present Venture Capital development in China.AH these are based on the related statistic data and my practical investigation .Based on these data and analysis, the problems in present Venture Capital operation mechanism have been pointed out. In the fourth chapter, by the theoretic and comparison, a series of methods improving the Venture Capital mechanism in China have been put forward, such as: enlarging the financing source, setting up the multi-level financing system, developing more efficient and incentive organization form such as .fund form and limited partnership form. improving the risk control and strengthening management after investment. Besides these methods, we should develop different way to reclaim the capital, such as going on the stock market through purchasing or borrowing stock shell and enterprise repurchase, the property exchange market and OTC market are also considerable. The macroscopic system involved Venture Capital operation has been discussed. Some commends have been put forward to guarantee these methods can be carried out successfully.