On A Limited Partnership Legal Value, Improve China's Venture Capital System

Venture capital is money provided by certain entities which invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors but with higher risks at the same time, expecting to gain higher rewards. The whole process is an integrated system consisting of fundraising, investing, management-providing and exiting. Venture capital industry first established in the United States and has developed quickly and broadly across the world since 1980s. From the practice and experience of American venture capital industry, limited partnership is a typical and successful buildup for venture capital. The justification lies in the unique advantages of limited partnership itself as well as its perfect match with the nature and internal need of venture capital investment. Venture capital investment first appeared in China in 1985 and has developed relatively slowly because of lacking suitable legislations and regulations. The concept of limited partnership has not been adopted by China's legislation yet, which denies its application into domestic venture capital industry. We must be aware of the importance of limited partnership in venture capital investment system and promote the relative legislations as soon as possible.