The Risk Of Ipo Research, Obstacles And Countermeasures

Venture Capital originates in England and prospers in the USA. As a new system of investment and financing as well as a kind of commercial investment, it plays a significant role in facilitating modern economy, especially hi-tech economy. What's more, it has become a pop filed of research for modern economics and management. The start of venture investment in our country could be traced back to the middle of 1980s. The first enterprise of venture investment of China, Sino New-tech Foundation Investment, was founded in Beijing on 11th, January, 1985. Hereafter, despite the fact that the venture investment of our country did gain some development, the pace of development is relatively slow because of the effects of various elements.The key factor for the successful venture investment is the smooth exit of venture capital. The problems of venture investment in our country lie in the unfavorable exiting mechanism. For successful investment, the expedite exit does not only mean the gaining of profit, but also the benefit resulted from the rise of market value of the enterprises. If the investment is failed, the existing of venture investment gives rise to the withdrawal of part of the investment capital, which could lessen the loss. Therefore, perfecting the exiting mechanism is significant to the development of venture investment in our country.At present, in theory, it is publically recognized that Initial Public Offering (IPO) is the best exiting mechanism for venture capital. However, due to the deficient capital market, it is hard to apply IPO to the venture investment in our country. My paper is the reflection and research on the obstacles and the corresponding solutions of IPO in our country's venture investment. On top of that, several proper and feasible models are discussed under the environment of current laws, markets and policies in the view of enterprises to solve the problems originated from unfavorable IPO exiting mechanism of venture investment in our country. It has 5 parts. The first part is the introduction, which deals with motivation of this paper and the problems to be solved. The second part describes the meaning, characteristics and working modes. The third part focuses on the importance of the existing of venture investment, the four patterns of existing modes and their respective features and validities. The forth part concentrates on the venture investment in our country and the situation and obstacles of IPO existing mode, and analyzes the second board markets of the America and Hong Kong so that some of their experience are concluded to use for reference. The fifth part is the keystone of the paper, which puts forward the solutions and advice on the IPO existing mechanism on the basis of the current condition of venture investment in our country, presenting five feasible patterns for venture enterprises.