The assessment and the selection of new projects is very important for venture capital finance. Though the rate of return from venture capital is very high, the risk is very high too. In order to achieve high profitability, the VCs(venture capitalists) have to focus all their attention on the risk control in the early stage – the stage of project selection.For this reason, from the viewpoint of VCs, this thesis specially studies how to control risk in the stage of project selection.Firstly, this thesis introduces the definition of venture capital, its operation, its characteristics, the significance of developing venture capital and the importance of the stage of project selection. Secondly, the meaning of high risk and the causes are deeply analyzed, and also the risk is broadly sorted into two categories; Thirdly, it theoretically puts forward a method to measure the risk of venture capital; Then, it investigates the strategies of risk control in the stage of project selection, including the identifying and the control of all types of risk, and other strategies such as staged financing, anti-dilution provisions to secure the VCs' equity position in the company, stock option for the entrepreneurs of ventures and combination of investment. Finally, it supplies a scientific and efficient program to control risk for VCs in the stage of project selection, and it also gives a case as an illustration in using the methods given in the thesis.
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