Domestic Venture Capital Exit Mechanism

This thesis is an attempt to analyze the theories and practice of venture capital withdrawal, in which more attention was paid on the feasibility and countermeasure of various withdrawal channels in China.Firstly, this thesis will explore the theoretical knowledge of venture capital including its concepts, history and five operating phases. During the whole venture capital lifecycle, withdrawal should be the most essential one which is an important method of gaining profits. Secondly, this thesis will compare the existing routes of venture capital withdrawal between the United States and Europe. As the cradle of venture capital, the United States' main VC withdrawal channels work with Initial Public Offering and merger/acquisition, thus, they have the most flexible capitals and the most successful growth enterprise market. However, the practices of VC withdrawal in Europe are quite different. European VC investors prefer to Buy-back and Merger/Acquisition instead of IPO. And then the thesis will analyze the domestic circumstances of VC withdrawal. The main withdrawal channels are Reverse Merger, Over-The-Counter (OTC) trading, IPO on overseas GEM and Merger/Acquisition. Since there is no growth enterprise market in mainland China, it is more feasible to choose Merger/Acquisition as VC withdrawal route.Through the above research and analysis, the author concludes that it should widen the channels in these THREE ways to facilitate the withdrawal mechanism of venture capitals.1) Endeavor to set up our own growth enterprise market;2) Encourage domestic venture companies to commit IPO abroad;3) Strengthen the construction of Over-The-Counter Market to perfect channel of Merger/Acquisition. The following comes with two case studies. One is analysis of the main obstacles and solutions of SINA IPO's entry into NASDAQ. The other is how KaraTV.com chose the best withdrawal method.