| As a new financing method, venture capital financing not only provides funds to the enterprises, but also makes them success, or even cultivates a certain industry in some way. The fast growing venture capital market has made the theories on venture capitalist's micro-behavior and its role in making up a success enterprise become popular in academic studies.This paper sets to bring up the point that venture capitalists have improved the enterprise's internal value and its market value by focusing on the agent-principal relationship in the frame of asymmetry economics. By empirical studies on the 102 listed companies in Shenzhen Small and Medium Enterprise Market, we have proved that venture capitalists have added value to the enterprise and that venture capital-backed companies are less underpriced than non-venture capital-backed companies in the initial public offerings.By analyzing what drives the venture capitalists to provide value-added services to their investee, we found that venture capitalist may have played several roles in making up successful new start-ups, which fall in tow categories, that is internal valued-added and market value-added contributions. Since in order to cut down agent cost in the asymmetry relationship between the fund provider—venture capitalist and the fund user—entrepreneurs, the venture capitalists choose to screen their investment prudentially and monitor the investment afterwards, as well as providing valued-added services. Thus improves the enterprise's internal value. On the other hand, in order to keep their reputation in the capital market, venture capitalists are likely to price the enterprise they invested in equal to its internal value in the initial public offering, which alleviates information asymmetry problems in IPO market, thus improves the enterprise's market value.In the end, we put forward some advice to promote venture capital industry in China, and open up academic fields in future studies on venture capital. |
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