Research On Operating Mechanism Of Venture Capital Organizations

The start of the VC (shortened as "VC") industry began in the 1940's. More recently, VC has firmly established itself as the "engine" for high-technology enterprises.As the bridge between VC providers and Venture Enterprises, the operating efficiency of VC Organizations has direct influences on the whole system of VC. Hence, the scientific operating mechanism of VC Organizations is the key to develop VC industry successfully.Focusing on the main problems existing in the operating of VC Organizations now in China, the paper studies on how to establish the scientific operating mechanism of VC Organizations.First, the paper makes a brief introduction of VC, concludes the essence of VC as the financial systems engineering, which combines financing and investing with enterprises managing and capital operating.Second, the paper analyzes the character of VC Organizations. As Knowledge-based Organization, the operating mechanism of VC Organizations includes perfect harness mechanism, scientific business circle. Then, analyzes the harness mechanism from organization form,incentive and restriction mechanism, studies on the business circle from capital raising,due diligence,investing management,existing projection, etc.The study of this paper can be concluded as followings:1. The sources of VC in China should be widened to come from government,corporation,insurance fund and other social capital, and the operating model should be turned from direct investment to fund under entrusted management.2. Due diligence, which is the important way for VC organization to know the authenticity of the business plan, is the key to make investing decision.3. The successful management of invested enterprises has important influence on the development of VC organization.4. Exiting mechanism is the way out for VC.