Study On Venture Capital For Promoting High-Tech Enterprises Growth

Knowledge-based economy is mainly based on high-tech enterprises. As theincubators and boosters of high-tech enterprises, venture capital provides a goodfinancial channel for high-tech enterprises. It is good for science and technologyinnovation, and promoting knowledge-based economy development. Venture capital forhigh-tech enterprises not only provide financial support, but also provide value-addedservices, which provides an positive role for the growth of high-tech enterprises. But thedevelopment of China’s venture Capital is relatively late.At present,related policies andregulations are incomplete, the exit mechanism is not sound, lack of understanding ofthe role of venture capital.All the unfavorable factors restrict the rapid development ofChina’s venture Capital and growth of high-tech enterprises.This paper studies on venture capital for promoting high-tech enterprisesgrowth.First,based on venture capital theory and theory of the growth of high-techenterprises, and concepts such as venture capital, high-tech enterprises and other relatedare defined. Then this paper focus on the different roles that venture capital plays in theprocess of high-tech enterprises growth,and construct a theoretical model. By takingOptics Valley of China as an example, this paper introduces its venture capital, and fromthe point of the high-tech enterprise, as well as venture capital firm,this paper is toverify that venture capital plays positive role in the process of high-tech enterprisesgrowth. Moreover, by executive interviews, I find some problems that venture capitalpromote the growth of high-tech enterprises in Wuhan Optics Valley of China, then putsforward to how to promote high-tech enterprises by venture capital.The mainconclusions drawn from this paper include:1．In addition to financial,what important thatventure capital support for high-techenterprises is providing value-added services, including the establishment of modernenterprise system, facilitating the recruitment of senior management personnel,improving the internal management system、business development proposals; finance,marketing consultants to provide the network relationship services; promoting corporatereputation.2．In accordance with enterprise life cycle theory, the growth of high-techenterprises are divided into four stages: seed, creation, growth and maturity. The high-tech enterprises in the process of growth are mainly faced four major risks:financial risk, technology risk, market risk, management risk. A different stage of theenterprises have not characterized, and the risks faced in different stage are not the same.And venture capital in each stage, according to the needs of the enterprise itself anddifferent risks, will do different decision-making and help，promoting the growth ofhigh-tech enterprises.3．Venture capitalists involved in all stages of high-tech enterprises growth toprovide financial and value-added services, given the interests of both sides, ability, andcultural qualities, objective conditions, policy differences etc.4．By analyzising the influence of venture capital to Huazhong Numerical ControlCo., Ltd (HNC), as well as case studies of successful investment of Wuhan Science andTechnology Innovation Investment Ltd., it confirmed in the process of high-techenterprises growth, venture capital indeed plays a positve role. But it is still subjected tomany factors.The innovation in this article is: First, proposing the theoretical model that venturecapital promote the growth of high-tech enterprises Second,this paper research on thepositve role of venture capital in Optics Valley of China for high-tech enterprisesgrowth.Third, puting forward the recommendations to promote the growth of high-techenterprises in Wuhan Optics Valley of China by venture capital.