The Relationship Research Of Three Parts In Venture Capital

Venture capital is a comparative new financing system. It refers to two firms-the venture capital firm and the entrepreneurial firm, and three parts-investors, venture capitalists and entrepreneurs. The whole process is going around with these two firms and three parts. Studying relationships between the three parts and designing a set of feasible contracts are important to the success of venture capital. Nowadays, most of the scholars in homeland and abroad respectively studied the relationships between investors and venture capitalists, venture capitalists and entrepreneurs, based on the agency theory. And the venture capital contracts are designed to motivate and restrict agents. This paper assumes that the competence theory of the firm is more suitable for explaining venture capital activities, compared with the modern firm theory, which is not sufficient to describe venture capital activities. So this paper studies the former two relationships with the competence theory of the firm and deepens researches on relationships among the three parts, resulting that the three parts form an investment chain and a team with the same interest. To achieve the huge success, they need mutual knowledge backgrounds, study with each other, and form special resources, competence and knowledge, which rivals are hard to imitate. Hereby, this paper complements the related contracts.