Analysis Of The Theory And Operation Of Venture Guarantee

Venture guarantee (VG) is a small branch of venture capital (VC) investment, and it is operated based on guarantee contract. VG combines venture capital investment and credit guarantee business, so it contents both equity and liability relationships. In this pattern, the guarantor takes the rights to distribution the borrower's profits as the counter-guarantee measure. If the warrantee develops successfully, the guarantor needs not to refund the debt, also it can get excess returns as the shareholder. In the traditional pattern, the guarantor always faces the problem that its income can not offset the high degree of risk. VG solves the problem and provides a new way for the SME's finance.The purpose of this thesis is to give a sum-up of VG both in theory and practice. Firstly, based on the theory of VC and credit guarantee, it digs out VG's economic basis. Secondly, the writer gives an introduction of the VG's operation process, and analyses the main mode, option VG, in detail. Thirdly, the writer concludes the risk factors in this new guarantee pattern, and gives her advises. Finally, case study, which was about VG practices of Shenzhen High Tech Investment & Guaranty CO., LTDIn this thesis, the writer tries to employ different methods, such as antitheses, induction and deduction, and compares the differences among VG, VC and credit guarantee business. Both at the point of theory and demonstration, the thesis analyses the successful VG practice in China. In China, VG is still young, and it needs more practices to develop. So, this thesis emphasizes its advantages and shortages which come from uncertain factors and gives some advices.