Equity Financing For Smes And Venture Capital Interaction Study

Nowadays the human beings are going through a global technological revolution and every country takes innovation as the key point and the main means of economic competition. China also pays much attention to the self-innovation. And the small and medium-sized enterprises play a key role in the revolution. Though the scale of small and medium-sized enterprises is small, the system is flexible. They involve various trades, especially Hi-Tech trade, so they have original and flexible characteristics in innovation. Though small and medium-sized enterprises are the main force in the revolution, for many reasons, the developing environment for small and medium-sized enterprises is still not good. They do not have enough financing channels and support from the government, especially in China. Not only do they face the short-term financing predicament, but also lack the long-term development fund-capital. The main reasons are the financial environment for the small and medium-sized enterprises and limitation of themselves.In order to solve this problem, every country is trying hard to find a kind of efficient capital for the small and medium-sized enterprises. Right now Venture Capital is prospering in many countries and its characteristic, function and operating mechanism are just suitable for the development of small and medium-sized enterprises, especially for those in the establishing and expanding period. It provides the most needed long-term fund-capital for them. And the development of small and medium-sized enterprises also promotes the development of Venture Capital . The existence of Venture Capital lies in the higher proceeds while at the same time undertaking the corresponding Venture. The development of small and medium-sized enterprises increases the channels of Venture Capital and makes it possible for Venture Capital to obtain high proceeds.Between small and medium-sized enterprises and Venture Capital , it is not a course of mutually promoting but a course of complicated inter-dynamic. In order to achieve each goal, small and medium-sized enterprises and Venture Capital are playing games in either financing or...