China Venture Capital Exit Mechanism Legal System

In the past more than half a century, the venture capital (hereafter "VC") has promoted the upgrading of the global industrial structure and economic growth. From the eighties of the last century, VC has been introduced to China, and the government has given it great expectations, but VC faced a lot of difficulties. Despite of the problem of our own economic development, the market system is not perfect, and the related laws and regulations are not complete, these above obstruct the development of VC. Based on the above, how to combine our own practice, to learn from the experience of advanced countries, to modify and complete our existing system, protect the venture capital exit mechanism is the major issue.The paper consists of four parts.The first chapter introduces the concept of venture capital and the exit mechanism of venture capital. Firstly, collect the different understanding of venture capital, and come to the common. On the basis, analysis the cycle of venture capital, and come to the exit mechanism for venture capital is the key segments of the cycle. And this chapter introduces four exit channels:Initial Public Offering; Sales (mainly Mergers&Acquisition), stock repurchase and write-off. Finally, the advantages and disadvantages of those exit ways have been made from the three aspects of the revenue, cost, timeliness.The second chapter describes the course of development of the Chinese venture capital industry, as well as the status of the Chinese venture capital exit mechanism. With examples,The author pay emphasis on the way of Chinese venture capital exit.The third chapter analyzes the China Growth Enterprise Market and the three OTC options market.In this chapter, the author analyzes the problems of the China Growth Enterprise Market and the OTC options market, and gives the author's view.The final chapter is to analyze the obstacles that the Chinese venture capital faces,and put forward the suggestions for improvement,which is the end-result of this article.Specifically, in this chapter, the author analyzes the policy that the state-owned shares switched, the obstacles of mergers, acquisitions and share repurchases. On this basis, the author gives the suggestions on the legal system about Chinese venture capital.