The Study On Investment And Management Behaviors Of Venture Capital Institutions In China

Venture capital is a rising investment industry. It plays an important role in economic development of countries, especially in developing of high-tech industry and creating new job opportunities. The venture capital industry in China has experienced several stages of development; it is now entering the stage of adjustment and becomes more rational in investing. The paper makes an empirical research on the base of the database of "The Research of Development Situation of Venture Capital Industry 2003". Four sorts of hypotheses (about investment stage preference, management experience and ability of VC firms, capital scale of VC firms and the source and structure of venture capital) are made, based on previous studies in this filed. The goal is to summarize the characteristics and decision-making rules of the venture capital firms' investment and post-investment management activities. Hypotheses are tested, and the conclusion is reached that there do exist differences among venture capital firms' behaviors. At the same time, the paper analyzes and summarizes the influences that regional centrality and public policy impose on the behaviors of venrue capital firms. Three venture capital firms were visited and analyzed as cases. The result shows that there do exist differences among behaviors of venture capital firms.The result of the research: three conclusions are made: 1. Venture capital firms will pay attention to different decision-making rules under different stage preferences; 2.The differences of mangement ability, capital scale and source, and discernment of projects lead to different stage preferences; 3. Regional centrality and public policy have great effects on the behaviors of venture capital firms. The VC frims in China can be devided into five categories, they are: 1. VCs who have few management experiences, medium capital scale, mainly government controlled, prefer early-stage projects, participate little in firm management. 2. VCs who have medium management experiences, large scales, mainly owned by listed companies, prefer late-stage projects, participate in management more. 3. VCs who have medium management experiences, small scale, mainly owned by financial institutions or banks, almost participate no management, and have no stage preference. 4. VCs who have lots of management experiences, large scale, mainly owned by foreign capitals, and prefer early-stage projects. 5. VCs who have lots of management experiences, small scale, mainly owned by civil enterprises, prefer early stage projects, participate more in management. This conclusion fills up the blank of venture capital research in the field of behavior research.