The Formation Of Legal Mechanism In Chinese Venture Capital

Venture capital, as a venture investment vehicle to support entrepreneurs, has played a huge effect in the incubation of innovative SMEs, promoting of high-tech industry, widening of job market, increasing employment opportunities, optimization of resources allocation, and fostering new economic growth. Chinese Premier Wen Jiabao in his government work report in 2008, clearly pointed out the need "to expand the scope of venture capital pilot," and "to establish the Growth Enterprise Market." First of all, from the perspective of sounding legal environment of venture capital, this paper illustrates the current difficulties faced by venture capital industry in China, analyzes the reasons of legal aspect in the plight. Secondly, it gives an in-depth and comprehensive exploration of U.S. venture investment legislation, the most comprehensive legal system in the current, sorts out a fragmented legal framework, which constitutes of basic provisions of the law on the securities, investment, finance, social security etc. Finally, it proposes how to improve Chinese legal system of venture investment.