Venture Capital, Moral Hazard And Evaluation System

With the globalization of economy and the acceleration of industrial structureallover the world, many countries have been paying great attention to thedevelopment of hi-tech-industry. From 40s of last century, the success of venturecapital in America had promoted the transformation of the hi-tech and impulsed theeconomy of America. As for China, the development of venture capital has greatinfluence on the development of hi-tech industry, the upgrade of conventionalindustries and the action of the mode of economy growth.The venture capital has some problems, such as low efficiency, little capitalscale, not building manager market of venture capital, lacking incentive &restraining mechanism, no smooth withdrawing channel of venture capital.By studying, we found that asymmetric information causes moral hazard inventure capital industry and make the venture capital industry develop inefficiently.In this article, information economics has been applied to the research of the gamebetween investor and venture capitalist, and the moral hazard. On this issue, theresolutions have been mentioned in the past articles, such as investing stage by stage,the using of convertible preferred stock, the "pawl"condition, arrangement ofventure enterprise management's option and venture enterprise management'scontract of employment etc. But in the functioning of operation, the part ofresolutions above-mentioned can not be put in practice in the unusual environment inChina. This article tries to study investor's agency venture due to asymmetricinformation and how to use advantages of information system to conquer agency risk,and stimulate the venture capital market and make the venture capital industrydevelop high efficiently.This dissertation depicts the problem of venture investigation recently, andindicates that moral hazard is one of the main reasons of low efficiency in ventureinvestigation. This paper analyzes the moral hazard in venture investigation andsumarizes the precautionary implements. Then it presents to build evaluation systemfor moral hazard in venture investigation. Lastly, it summarizes the research in this...