China's Venture Capital And The Second Board Market

Venture capital plays an important role in the development and boom of new and hi-tech enterprises. Venture investment, or venture capital, with a characteristic of high risk and profit existing side by side, is a new and special financial operating system. Since 1946 when the first venture capital corporation, American Research & Development Corporation, was founded, venture capital has stepped into a course of systematization and specialization. In this essay, by analyzing the American venture investment business, the author summarizes the main financial sources, the organizational modes of risk fund, and the main characteristics and functions of venture investment in the U.S. Meanwhile, by researching the course of the venture capital business in the U.S., Japan and Taiwan, the author analyzes the current situation and defects of Chinese venture investment business by making comparison with the above-mentioned countries or regions. Faced with china's actual conditions and the bottle neck in the development of china's venture investment business, the author puts forward such policies as opening up more channels of absorbing fund for venture investment, strong support from the government by providing policies.To gain the high profits from venture investment, we must establish a mechanism of investment withdrawal to provide investment conducts with a secure shelter. And whether the problems concerning the investment withdrawal can be effectively solved or not is closely related to the sound development of our venture investment business. From a mid or long-term view, it is imperative to set up a second board. In this article, the author analyzes the feasibility and the necessity of establishing the second board in our country, and mentions the urgent task of resolving the contradiction and conflict between present legal environment and investment practice. Since the issue of the risk in the second board has caught the attention of every party concerned, to curb the risk likely to occur during the operation of the second board market, we should avoid the problems at the preparatory stage. The following tasks must be put special focus on: reducing the administrative intervention to facilitate the process of issuing and checking stocks and to promote the sound development of distributing market, introducing the competitive selection system into the market to lay a solid foundation for the second board and boost the development of investors' investment conducts and controlling the rhythm of the distribution of listed securities at preliminary stage and the scale of initial raising of fund etc.