Study On Risk Management Of Venture Capital Firms

Venture capital originates in USA. The first venture capital firm in the world is "American Research & Development Corp. (AR&D) " who founded in 1946. And in the several decades after that, because their important functions to resolve the shortage of fund and management experience in hi-tech industry, venture capital firms develop rapidly in every country of the world. And they are called "hatching device" of development of hi-tech industry. The first venture capital firm in our country is "Chinese New Technology Venture Capital Corporation" who founded in 1985. Venture capital firms made great progress in our country in recent decades, and made important contribution to promote hi-tech industry, and further, to drive the national economy of our country.Risk management is a method of management to minimize the loss by defining, measuring and controlling risks. It originates in 1960's in USA, and then it is gradually disseminated to Europe, Japan and other area. Its processes include: distinguishing risks, estimating risks, evaluating risks and controlling risks. At the same time of holding common characters of risks management of general firms, venture capital firms hold own specific ones. These are determined by their characteristics of high risks and high gains. Risks of venture capital firms mainly stem from a large number of indefiniteness (or called randomness) in the course of operating capital. Present researches on risks of venture capital focus on evaluating the risks of investing objects, but ones on the risks of operation and management of venture capital firms themselves are few. Aiming at the reality in firms' operation, the thesis divides their risks into two parts: "Risk in Selecting the Investing Objects" and "Risks in Operation and Management". According to the two parts, the thesis establishes respectively systems of evaluation targets, and uses "Synthetic Evaluation" and "Multi-stage Fuzzy Comprehensive Evaluation" to analyze and evaluate them. Then, in the light of above risks, it puts forward the corresponding measures to prevent and control them. Finally, in order to make some help for healthy development ofventure capital firms in our country, it also puts forward some suggestions for the government policies.