Study Of The Organizational Form Of Risk Investment Institutions

As the roll booster of high-tech industry, venture capital investment has developed rapidly since the 1940s. Nowadays, with the international competition on technology, venture capital investment has nurtured the growth of high technology and entrepreneurial communities resulting in significant job creation, economic growth and international competitiveness. Venture capital investment has been a most indispensable project to promote the economic development, to expedite industrial restructuring and technological developments and to enhance national power of a country.Since the efficiency of venture capital depends on the efficiency of its institutions and that of venture business, venture capital institutions, as the core of venture capital investment, are of great significance. This thesis, from the perspective of organizational forms, analyzes the efficiency of institutions of three kinds: Limited Partnership, Trust Fund, and Corporate.Chapter One outlined venture capital. Some authoritative implications of venture capital at home and abroad as well as its operation course and stages are also explained.Chapter Two focuses on some aspects of the principal-agent relation in venture capital, including its formation and affirmation, principal-agent problems, agency cost and the ways to reduce it.In the third chapter, relations of organizational forms of venture capital institutions to their efficiency are elaborated. By comparing Limited Partnership, Trust Fund and Corporate from the aspects of institutional incentives, institutional constraints and operation costs, we come to the conclusion that Limited Partnership is the most efficient in that, as an innovative organizational form of venture capital institutions, it suits venture capital investment, the innovative finance. Trust Fund follows it and Corporate is the least efficient one.In the fourth chapter, the problems in organizational forms of venture capital institutions in China and their solutions are discussed. An innovative frame of organizational form is introduced, on the bases of which, the reasons resulting in the singularity of organizational forms of venture capital institutions are analyzed and consequently their solutions are provided. These solutions are to innovate on the institutional environment to make Limited Partnership and Trust Fund the dominant forms of venture capital institutions.