Font Size: a A A

Venture Capital In Understanding,

Posted on:2003-04-30Degree:MasterType:Thesis
Country:ChinaCandidate:Z YanFull Text:PDF
GTID:2206360092470630Subject:Finance
Abstract/Summary:PDF Full Text Request
Along with the development of Knowledge Economy, the venture capital enterprises featured with hi-tech companies have boost the global economic growth, hence the venture capital investment which provides fund support to such enterprises has also caused attention in the finance business. The present research has focused on the financing function of the venture capital to the growth enterprises. In fact, venture capital serves for the venture enterprises under knowledge economy as a new means of financing, thus it has some differences from the traditional financing channel.The paper discusses the special features of the venture enterprises which is the main client of the venture capital. After introducing the ownership theories in the institutional economics, the paper illustrates the structural arrangement of the ownership especially the ownership structure in the venture enterprises at different stage. The paper puts emphasis on the requirements for the venture capital to establish centralized ownership of the growth enterprises. Therefore, the venture capital should have more functions other than financing functions: such as management function, incentive function, supervision and constraint function, etc. The adventure capitalists should actively take part in the management of the growth enterprises, helps to devise the option incentive mechanism and MBO plans, advocate the centralized ownership structure, and strengthen the supervision and constraint.Taking into consideration of the drawbacks of the venture capital development in China, the paper gives some policy recommendations from the view-point of perfecting the institutional arrangement and strengthening the non financing functions of venture capital.The paper consists of three parts:Part One:This part analyzes and discusses the ownership structure of the venture enterprises by applying the organization cost theory.First, the paper limits the conception of ownership structure: The ownership means the combination of the property right and the management right. The two rights compose the basic content of ownership. So their relationship is the ownership structure. The paper analyzes the three kinds of ownership—proprietorship, partnership and share holding companies. This paper discusses the best ownership structure is when the total company cost reaches the least by analyzing one company's cost model. Then, the paper analyzes the venture enterprises---born under the new economy situation---and its ownership structure in all development phases. In the internal part of the venture companies, there exists higher contract cost, this demands the company to combine the funds, technology and management effectively, adopt ownership structure more concentrated system. So the standard stock company system isn't the best ownership structure for the venture enterprises in the development stage, these companies often apt to the private holding company. Part two: The paper regards the non-financing function of venture-investment as the assistant of the foundation of the ownership structure concentration. In this part, the paper discusses the non-financing function of venture-investment separately, which include: the management function, encourage function, market withdraw function supervision and restrain function.(1) Management function:The initial of the venture-investment is that it's an professional management capital for the new company or high-venture and high-growth company. The venture capitalist will positively participatethe management of the company. "Among the stock investment business, the venture-investment has its original character: the venture capitalist not only provide the consulting service but also participate in the daily management of the company as the big stock holder in the venture-investment course.(2) Encourage function:The ESO and ESOP can help the venture enterprises to transfer its manager to the owner by rewarding the stock, thus combine the ownership and the management ri...
Keywords/Search Tags:venture capital, enterprise ownership structure, non-financing function
PDF Full Text Request
Related items