The Study Of The Withdrawal Of China's Venture Capital

With the emerging of information and technology revolution characterized by internet in 1990' s, venture capital is developing fast globally.As an important financial tool of supporting high technology, venture capital is such kind of investment with high risk and high return, whose success depends on the withdrawal of venture capital. Therefore, the withdrawal of venture capital is a prerequisite to the existing and developing of it. Smooth way of capital withdrawal ensures that high return will be attained and determines whether venture capital will succeed or not.This thesis is an attempt to analyze the theories and practice of venture capital withdrawal. It compares and evaluates the major withdrawal channels such as IPO, Merger/Acquisition, and Buy-back in which more attention is paid to the feasibility and countermeasure of various withdrawal channels and the obstacles of withdrawal in China as well, and put forward the suggestions about the construction of perfect regulations and multilayer capital market especially the growth enterprise market.The thesis consists of four chapters. In the first chapter, the thesis explores the theoretical knowledge of venture capital including its concepts, history, and analyzes the significance of the introduction of venture capital. In the second chapter it elaborates on five operating phases such as raising capital, choosing and evaluating the item, negotiating and contracting, managing and withdrawing. During the whole venture capital lifecycle, withdrawal should be the most essential one which is an important method of gaining profits. In the third chapter,it compares the existing routes of venture capital withdrawal between the United States and Europe. As the cradle of venture capital, the United States' main VC withdrawal channels work with IPO and Merger/Acquisition, thus, they have the most flexible capitals and the most successful growth enterprise market. However, the practices of VC withdrawal in Europe are quite different. European VC investors prefer to Buy-back and Merger/Acquisition instead of IPO.And in the fourth chapter the thesis analyzes the domestic circumstances and problems of VC withdrawal. The main withdrawal channels are Reverse Merger, Over-The-Counter (OTC) trading, IPO on overseas GEM and Merger/Acquisition. Since there is no growth enterprise market in mainland China, it is more feasible to choose Merger/Acquisition as VC withdrawal route.Through the above research and analysis, the author comes to the conclusion that it is urgent to make laws, regulations and policies related to venture capital more perfect and to establish multilayer capital market in particular the growth enterprise market in support of the good development of venture capital. It is an important step for the development and perfection of China' s capital market to build up the growth enterprise market, which has the significance in growth of the venture capital and the industrialization of High-tech. The author thinks that we should create the conditions to build up the growth enterprise market by virtue of international experience and lessons and make it work well and become the main withdrawal through reasonable instructions and specific operations in order to build up multi-level withdrawal of venture capital in China.