The Perfection Of Relevant Legal System Of Venture Capital Exit In China

In the past more than half a century, Venture Capital (VC) has greatly promoted the economic development and the upgrading of the industrial structure in American-European countries. Although the Chinese government attached great importance to venture investment and give a lot of expectations from the introduction since the mid-1980s, the VC industry has been slowly to develop and play its rightful roles. VC originated and developed in the developed market economies and the corresponding system environment, China is in its economic transformation, the related system of market economy is still not perfect, the legal system has created a lot of obstacles to the development of VC, and especially in the exit system there are many issues to be resolved. Now in the light of local conditions and drawing on the useful experience, Adjusting the original system,accelerating the institutional innovations and achieving a smooth mechanism of VC exit is a major issue of the VC system.All academic disputes ultimately originated from the discrepancy of concept. In the first part , this thesis starts with two controversy translation of the "venture capital" and "risk investment", and gets the conclusion by using the method of the language of analytic philosophy: "venture capital" is probably a more appropriate translation in China, it can adequately demonstrate the essence that VCs support and counsel the enterprise through the capital support and capital management services, and also makes people have correct understanding of high-risk in venture capital. Then, by researching the origination and development of the concept of venture capital, the author summarizes a general definition.Next, the thesis introduces the operation mechanism of VC: VC institutions finance from venture capitalists, then devote venture capital into venture businesses, and provide value-added services. With the growth of enterprises the venture capital increases. The VCs exit after the venture enterprises reach a certain stage with eventual realization of the value and recycling into the next round. If there is no exit mechanism, it will be impossible to achieve capital appreciation and virtuous VC circle, and certainly new venture capital will not be attracted. So the exit mechanism is the key aspect of VC operation mechanism.In the second part, the thesis focuses on exit mechanism. It concretely discusses the significance of exit mechanism of VC and introduces four exit channels: Listing (including IPO and buy unlisted), Sales (including M&A and repurchase), Liquidation (the agreement into liquidation and bankruptcy liquidation). Finally, the advantages and disadvantages of those exit ways had been made a simple comparison. Thus, there formed a theoretical platform about the research of the legal system of VC exit.For the exit system designing, we should also learn successful experiences and unsuccessful lessons about Venture Capital as an "import" from many other countries. So in the third part, the author selects some typical countries and regions such as United States, Germany, Taiwan to make a compare of the current exit situation with China. The United States, as the birthplace and most developed countries of modern venture capital, the system design is the most perfect. In the market-oriented financial system, there formed an advanced, multi-layer capital market and then played a crucial role on VC exit. Particularly for the two OTC markets of NASDAQ and OTCBB , their advanced market rules designing helped the United States'and many other world's VC withdraw successfully. In addition, there are many system designs to provide a variety of open channels for venture capital. By contrary, Although Germany started VC system early, its development is not too successful. And Taiwan is a best sample to start the VC successfully. China has the same background with Taiwan, but there are many obstacles now. Through the comparison, this part puts forward the chief task and key problem of exit mechanism of VC in China.In the last part, the thesis discusses the perfection of relevant legal system of China's VC exit. This is also the main innovative part. From the own perspective of VC, the author analyzes the legal obstacles and corresponding countermeasures which VC faced when exited from different manners in China's current legal system environment. And for the practical needs of VC exit, the author gives the advices on how to improve related legal system in China: It is important to establish an acceptable multi-level capital market, especially to establish a second-board market meeting the basic requirements of the existing rules. Meanwhile, it is also highly demanded to unify the property exchange market into a integrate one, changing the property market services and strengthening property market regulation, so it can function as a complementary to the second-board market much better. It also needs to revise the relevant laws and regulations, and to allow using various financial instruments. Only through these measures can set up a healthy standard and feasible exit system fitting our situation, can accelerate the growth of the nation's economy, and can stimulate the economic restructuring and technological progress.In this thesis the development and innovation is mainly represented as following aspects:First, the innovation on research perspective. Most relevant studies are on the perspective of system's construction, and this thesis is on the perspective of VC institutions, and to the practical need arising from the exit of VC, the author case-by-case analyzes the legal obstacles when VC exits under the existing legal system, and provides appropriate countermeasures.Second, the expansion on research level. In this thesis, the study of legal system is not only focusing on the macro-level system design, More important is the depth of the micro-level law, By comparative analysis of the rules design of abroad and China's Taiwan region, and reviews the lack of existing relevant rule of law in China's mainland, the thesis further gives proposal of the improvement of relevant legal system of China's VC exit.Third, research materials vary. For various reasons, there are still some provisions that constitute obstacles to the exit of VC in the revised or promulgated "Company Law" "Securities Act" and "Enterprise Bankruptcy Law", and induce a number of new problems, however the current academic research is rare, therefore, this thesis will be focused on.