Improve The Governance Structure To The Development Of Venture Capital

Venture capital has been operated with low efficiency in china since its beginning from the middle of 1980's, compared with its prosperous development in the United States. Therefore, it is a vital issue in china to develop venture capital, improve technology innovation, further promote the adjustment of economy structure and transfer economy increase mode. The purpose of this article is to find solutions to accelerate the development of venture capital in china by analyzing systematic factors which affect venture capital's result.We have entered the era of knowledge economy, venture capital is of great importance to develop our hi-tech industry, implement the strategy of stronger our overall national strength by technology and education, as well as transfer the mode of increasing economy.The paper is divided into 5 chapters.The first chapter, prelude, discusses the paper's background information, research intention and meaning.The second chapter reviews the organizing form and the operating process of venture capital, emphasizing on description of the corporate governance. This chapter mainly discusses four constitution forms of venture capital, they are small business investment corporation, investment angel, the subordinate investment corporation of financial institution and investment projects of big business. Different constitution forms relate to different investment objects and purpose, and lead to the different corporate governance and effects.The third chapter analyzes the economic significance of venture capital. The venture capital has succeeded in resolving the problems of converse selection and moral risks, which supplies the economic and efficient operation system. Corporate governance of venture capital has succeeded in combining the finance capital and the human resources of venture capitalist with great efficiency, which affords the system guarantee for the realization of venture capital's value-added potential.Corporate governance is the core factors which influent the effect of venture capital. Finally, some assumptions on how to establish the efficient corporate governance structure for venture capital in virtue of recent research conclusions of modern enterprise theory.The forth chapter analyzes existing problems of venture capital in china with the conclusion of the third chapter and the actuality of ventureinvestment, then offers several suggestions to accelerate venture capital's development in china. Firstly, venture capital should be based on market economy, and venture capital's corporate governance should be establish ; secondly, in order to accelerate the development of venture capital, the enthusiasm of two-grade government should be fully exerted. Finally is the paper's conclusion.