Research On Investment Decision Of Venture Capital And Its Application Based On Life Cycle Theory

The world economic development has entered the knowledge economic era. In this era, the knowledge-dense industry has become the core of all industries, which are the determined factors for a country to achieve competent advantages in a long run. A great deal of researches and experiences has shown that it is technology progress that is the key power to promote the sustained economic increase. The key that technology progress transfer into productivity lies in a system in which venture capital is the most kernel part. For a long time, because of venture capital's tremendous risk and high uncertain and the risks complex change in every stage, however, the success ratio of venture capital is always very low. Therefore, how to understand scientific the risk of venture capital, evade risk rationally and select potential project aim at different investment stages, how to constitute contracts for investment projects has become the difficulties and hotspots in the research of venture capital.This paper firstly study the whole processes of venture capital and study the risk features of every stage, in the meantime the changes of every stage's risk have been pointed out. Furthermore, the divided period estimation methods have been deeply studied. After the discrepancies of every stage have been analyzed, two index systems for estimation have been introduced on the base of Tyebjee and Bruno's index system. Then the Extenics has been applied to build up two estimation models. Compared with the traditional estimation methods, Extenics method can fully calculate the value brought from development features in venture capital, which can obtain the reasonable dramatic result in the decision-making of venture capital.Furthermore, this paper analyzes the constitution of transaction contracts when the projects of venture capital have been estimated. On the base of the tools' incentive function to both sides of investment, it is pointed out that mixed tools are the better choice for venture capitalists and enterprisers. Then the pricing methods in the decision-making of venture capital have been studied. On the base of the analysis of two major pricing methods, it is put forward that only one optional method can't solve the pricing problems rightly for the optional discrepancies in every stage. Different methods should be selected to solve the pricing problems that are in different stages. Then two optional pricing models are constructed, one of which can solve the investment pricing of seed stage and start-up stage rightly, the other of which is suitable to the investment pricing of expansion stage and mature stage. Finally, several strategic suggestions have been put forward for venture capitalists and enterprisers on the basis of application of models.