| The year of 1999 in China can be called the year of VC-Venture Capital. It seemed that nearly all of the projects or companies in connection with high technology, particularly the Internet industry in China, were exploring how to use VC. As for most of people, VC is the story of bringing a high-tech product, project or even only a fresh idea to the VC investors, and dragging big money out of them, then issuing the bonds certificates which might be listed in NSDAQ market years later, and finally turning into the millionaire or billionaire overnight. This attractive story has stirred up the dreams of many young people. And suddenly, you will find many of your friends gave up their leisure time and turned to putting up the Internet web station, although it might sound ridiculous. Obviously VC industry has been misguided in China. As a matter of fact, VC appeared in China in 1980's, but has not come into being due to the government interference and the lack of legal protection and withdrawal system.The development of VC has made great contribution to the progress of science and technology in foreign countries, especially in U.S.A.. After World War II, Professor George Doriot from Harvard University together with the entrepreneurs from New Scotland set up the first VC, namely America R&D company. So far a set of VC structure with scientific system has come true after plenty of the practice and experience afterwards within a couple of decades.Based on the tremendous achievement VC has made to the performance of high-tech industry, and some of the common misunderstandings towards VC, this thesis is supposed to explore in depth for VC in regards of the investment decision-making, financing decision-making and the withdrawal system which is the great obstacle for developing VC in China. The discussion will be presented from the view of the VC investor and VC Company respectively, in combination between VC and high-tech industry. The aim of the thesis is to let a person know more about the whole process of the VC and the relevant core issues, and put forwards the author's suggestion for the company who is willing to use VC, and the advice for establishing the VC industry with Chinese characteristics. The structure of the thesis is mentioned below:Part I. Introductory Statement. Introduction to the concept, character and existence evidence of VC, then the analysis of the current state and problem of VC industry development in China, and finally the necessity for high-tech industry to use VC.Part II. Combination of VC and High-Tech Industry.Firstly, making the investment decision from the VC investors' point of view: how to select, supervise, confirm and evaluate the prospective investing project or product, and how to carry out the cooperation with the approved enterprise.Secondly, presenting the issues that the VC enterprise must pay a close attention to when making the financing decision.Thirdly, analyzing in great details the core factor of VC, i.e. the withdrawal system for VC investment: firstly the introduction of the reason for capital withdrawing, then the discussion about the significance of establishing the capital withdrawal system in China's VC industry, and the case study of some of the withdrawal modes currently applied abroad and the adaptability in China, and finally the author's suggestions in establishing the capital withdrawal system.Part III. Establishing the VC industry with Chinese characteristics.Presenting author's idea and advice on the VC development in China, on the basis of analyzing the challenge and opportunity China VC industry is meeting nowadays. |
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