Research Of Hazard Management For Venture Capitalist Based On Asymmetric Information

As a new investment tool, the venture capital takes an important role in operation of small enterprises, especially for high technology companies. But for the asymmetric information between the Venture Capitalist and VC enterprise, it brings representative problem. It requires to build the effective, urgent and restricting investing system between them to get information and protect their benefits.The thesis discusses on how to use the effective tool controlling the investing hazard for the Venture Capitalist and design the urgent, restricting system for decreasing adverse selection and moral hazard. The thesis is based on theory and practice. Four parts are divided in the article.The first part makes a general exposition on Venture Capital concept, characteristic, nature and its process of development.The second part analyses asymmetric information and its internal mechanism in the venture capital market, including asymmetric information phenomenon, its occurring reason, influence and so on.The third part is core and focus of the thesis, focusing on analyzing the hazard that asymmetric information brings, and generally discusses to in what way the Venture Capitalist would control the hazard. It brings out the basis method to manage the hazard on asymmetric information and design the system to control the hazard.The last part introduces a case that a VC Capitalist "ZhongJi co.Ltd" madeevaluation and prevention for asymmetric information during investing VC project of "HuaXin co, Ltd" in detail, showing the application of the theory in the reality.