Venture Capital Research On The Principal-Agent And Financing Tactics

There are some kinds of principal-agent in venture capital of which high uncertainty of the post-ante earnings and the asymmetry between the capitalists and entrepreneurs. This paper indicate that with the use of stage financing and convertible securities, the rational planning of financing can settle the principal-agent problem, and implement the stimulation in venture capital, which give an explanation for the widespread use of these two tactics in venture capital finance.In Chapter 1,I give the relevant concepts about venture capital and the characterization of the principal-agent problem in venture capital, which is prepared for the next chapter.In Chapter 2, the controlling mechanism of the two tactics in venture capital is analyzed respectively.In Chapter 3,I set up a theory model to prove that stage financing, as a effective tactic without window dressing, should be used combining with convertible securities rationally designed when window dressing occurred.In Chapter 4, I develop the analyses above to the application of the tactics in venture capital, which are approved from the foreign data. Besides that, the practicing of venture capital financing in china is analyzed.In Chapter 5, I summarize the paper and make relevant recommendations and prospects.