Venture Capital Running Mechanism Study

The venture capital is a special commercial behavior of investing and financing, which refers to a venture capital organization' s collecting venture capital from investors by certain ways, investing it in a venture enterprise with the enterprising spirit, attending to the business management of the enterprise and providing services to increase in value. After making the venture enterprise larger and stronger, the venture capital organization withdraws the capital, pockets the profits and turns to another venture enterprise. The venture capital is an innovational tool of financing which takes fully use of the resources such as fund, technology and management as well as a way of the capital operation with the characteristics of transferring risks and increasing the efficiency of the capital operation. Rising abruptly and promptly in the world, the industry of the venture capital has become an effective means of the transformation and industrialization of the scientific and technological achievements in a country and an important factor ensuring the economic development and the structure adjustment in a smooth way. With the development of the industry of venture capital in China, the venture capital, the efficiency of capital allocation and the mechanism of corporate governance get more and more important. Therefore, it is of great significance to make studies on the venture capital, especially on its aspect of being the key mode of capital allocation, and to analyze its influence on the investing and financing structural reform.The paper analyzes the venture capital in a comprehensive way. Threading along the collection, taking use and withdraw of the venture capital and from the eyes of the venture capital organization, the paper argues that the venture capital is a special means of financing and investing and divides the mechanism of the operation of venture capital into three parts, e.g. financing mechanism, investing mechanism and withdrawal mechanism. The paper expounds the mature theories and models abroad and analyses the peculiarity of the operation of Chinese venture capital in practice in order to probe into how to establish Chinese mechanism of the operation of the venture capital. The paper is divided into five parts: The first part is an introduction of its theoretical and realistic significance. Meanwhile, it briefly introduces the statement of the studies on the venture capital at home and abroad. Finally, the author sketches clues, method and basic structure of the study; Part Two: Financing Mechanism. On the basis of listing all the sources of the overseas venture capital and taking the China's features into consideration, this part analyzes the sources of China's venture capital from two aspects: possibility and feasibility. All in all, at present, the venture capital in China is still on the beginning stage with the characteristics of simplicity of suppliers of the venture capital, the frequent interference of the government, the low passion of non-governmental groups ininvestment and the fact that the total supply volume of the venture capital, especially theavailable volume, is far behind the vast demand of the transformation of scientific and technological achievements and the development of hi-tech industry. Thus, in order to overcome the above-mentioned contradictions, it is necessary to adopt a series of powerful measures to guide and encourage listed companies, securities companies and overseas capital to participate in investing and to form the diverse supply subjects of the venture capital with listed companies as their main body. Part Three: Organizational Forms of the Venture Capital. This part makes a comparative analysis on three main organizational patterns of the venture capital organizationsfrom the points of the tax cost, the daily management cost and the incentive and confining mechanism, and the author points out the limited tied up corporate is the ideal style for the development of the venture capital. Then, the part introduces the statement of the venture ca...