Innovating The System: To Clear Off The Drawbacks Of Overly Participating By Governments

This article is begun with the conception of venture capital, its feature and significance. By analyzing the development of venture capital status in China, we consider that it is directly participated by the government.Then, we summarize the typical drawback of excess participation by governments, and analyze its basic reasons from the angle of system. It is considered that by reason of misunderstanding in venture capital's conception, our government chooses the wrong way to overly participate the development of venture capital and it leads to defects of the system.After analyzing the reasons to drawbacks, we further discuss how to clear off it through innovations of the systems. First, our government must correct the wrong acquaintance of venture capital, then, innovating the system of organization, property right, consignment-agency and supports. As the same time, we point out that to keep the continuous development of stated VC in venture capital, the innovation of its operating system is obligatory.