Research Of The Optimal Allocation On Venture Capital And Residual In Venture Investment

It is the key point to Optimal Allocation of capital control rights in Venture Investment and Residual claim right and residual control right(OAVIR) for venture investment companies to build their governance structure. However, a good governance is a core problem which determines the venture investment to be successful or not, the problem of OAVIR is both the starting point of venture investment and the final objective of the investors. Therefore, there are many problems to be solved in venture investment.First of all, the researches of the OAVIR in venture investment are summarized by this thesis. There exists obstacle both the operate mode and the retreat mechanism of venture investment in China. The problems of adverse selection and moral hazard by asymmetric information between venture enterprise and investors in China are analyzed as well. The two problems are unfavorable to the OAVIR. Next, base on the facts above, not only the operate mode of venture investment with which can realizes to the objectives of OAVIR and the effective capital retreat mechanism are presented, but also some decision making mechanism and incentive mechanism are designed which consist of some models of control and allocation, and the means by marketable bonds and stocks etc.. Through all the studies above, the problems of adverse selection and moral hazard in venture investment will be solved. Some conclusions are as following.Firstly, the operate mode of the limited partnership is one of the best choose in China in future, as it solves the problems of principal-agent and incentive, will ensure and promote the optimal allocation of the capital and residual. Because of there exists obstacle on law in the current operate mode of venture investment in China, the limited partnership and more effective operate mode will be explored and the law about venture investment will be modified.Secondly, to realize the objectives of OAVIR, many ways are presented in this thesis, such as capital retreat mode of the indirect IPO, the mode of multi-kinds capital market to be cultivated and perfected, and the Second Capital Market to be developed, and so on.Thirdly, in order to solve the adverse selection in OAVIR, the thesis analyses and designs risk decision-making mechanism, it could reveal the business abilities of the venture capitalist, and will realize the rule of high benefit by high abilities, however low benefit by low abilities. The rationality of risk decision-making will be ensured.Lastly, in order to solve the moral hazard in OAVIR, the thesis designs theeffective model about optimal allocation of capital and residual. It will solve the problems of power allocation among the decision-making bodies in venture investment. Otherwise, It will be solved optimal allocation about state-contingent control right of capital, and residual claim right and residual control right between venture capitalist and venture entrepreneur by incentive contract mechanism of marketable bonds and stocks.