Risk Investment Risk Control Strategy Research

Venture capital is defined by OECD as capital provided by firms who invest alongside management in young companies that are not quoted on the stock market. The objective is high return from the investment. Value is created by the young company in partnership with the venture capitalist's money and professional expertise. After the Second World War, especially from 1950s, with the rapid development of science and technology, venture capital has contributed greatly to the utilization of scientific achievements, technological innovation, enhancing the national competitiveness, economic growth and promoting the development of medium and small companies. Venture capital has a 20 years' history of development and thus has made great progress in China.However, the Chinese venture capital investment standard is low and lack of regulations on the whole. As for the venture capital, the Chinese national venture capital investment accounts for only 24% in the market. It is therefore far from being the kernel of venture capital.This paper studies the venture capital process. Based on the research of a company named S company, the paper dwells on 6 venture capital programs, and summarizes nine risks: personnel risk, analysis risk, financial risk, management risk, market risk, technology risk, capital market risk, government policy risk and system risk. From the perspectives of national venture capital organizations, a model of "venture capital risk management tactics" is found. By using this model, the venture capitalists can recognize and identify all the risks in venture capital process. At the same time, countermeasures can be made in order to avoid or reduce the risks and to ensure the success in venture capital program.