Research On Comparison Of IPO In The Withdrawal Mechanism Of American And Chinese Venture Capital

The core of the whole venture capital system is its withdrawal mechanism. Since venture capital is a combination of high venture and high profit and high profit has to be realized in a certain channel, in order to reach the goals of investors, the market so must has an amplify withdrawal mechanism to make sure that investors can withdraw their capital smoothly. And the success of venture capital also relies on a good withdrawal mechanism.In the withdrawal mechanism of venture capital, IPO is the chief and the best withdrawal channel. If a venture enterprise can withdraw via IPO, its investors can withdraw their venture capital and to get higher profit in other ways, moreover, the enterprise itself can get a chance for re-financing. And meanwhile, the enterprise can keep its innovation and a steady executive department. This is very important to strengthen the cohesion of its employees, rise its popularity and decentralize its venture capital.Most of the research of IPO of the withdrawal mechanism of venture capital abroad is based on the comparison of different withdrawal channels. For example, Pierre Giot studied IPO of capital venture enterprises, transference and clearance of accounts by means of eliminating analysis ; Cumming and Macintosh studied whether venture investors will withdraw totally or partly in the condition of IPO, offering for sale, re-purchasing, or clearance of accounts, and they pointed out the decisive factors of these five withdrawal methods.While our research lays special emphasis on the comparison of the IPO pattern and the pattern of withdrawal purchasing in the condition of non-symmetry information. And we also studied the IPO impelling withdrawal mechanism of both venture investors who based on the transference of controlling authority and venture entrepreneurs. By making a general survey of the researches in and abroad, it can be seen that most of them went deep into micro-studies and a series of withdrawal profits analyzing models have been set up. But there is a lack of macro studies of founding the system and mechanism of IPO withdrawal channels. Because there is no minor board market currently in China, it is too early to study a certain aspect of IPO of the withdrawal of venture investment. What is more important is that we need urgently to study the suitableness of IPO withdrawal method in China since that the venture investment withdraw in China has been in straits now. The system barriers and law barriers which are related are needed to be found out and then can we set up IPO venture investment withdrawal channels which are proper in China .This dissertation attempts to find obstacle and defects of Chinese venture capital based on the comparison of IPO in the withdrawal mechanism of American and Chinese venture capital. In China, there is no developed security market and no multi-strategies capital market but strict restrictions on main board market and the vacancy of second board market, so venture capital seldom is withdrew via IPO. The existing problems are: the premium on the first day of going public is too high, over-speculation is common everywhere, venture of investment is too high, the exposure of information is delayed, there is only weaken supervision and not enough protection for middle and small investors, the issue mechanism of IPO has not been well developed and this is unfavourable for the withdraw of venture capital of which the time for sale is limited. Moreover, the requirement for small and edium-sized business in China. It proposes buildup a second board on the stock market as soon as possible and improving the withdrawal mechanism of venture capital.