Venture Investment Fund Operation Model Of Finance Analysis

It has been almost20years since the venture capital industry emerged in China, and the role of Chinese government in support of the industry has transformed from direct investment to guiding type, which has achieved very good result so far. Venture Capital Leading Fund is proved to be very effective for government to promote the venture capital industry both theoretically and empirically. It integrates both government and private resources into the creation of new economy, and thus improves the economic competitiveness of the whole nation. It has far more impact than pure government behavior or market behavior. There are mainly two modes of Venture Capital Leading Fund overseas:joint stock and guaranteed financing. And in China, the vast majority of Venture Capital Leading Funds adopts the joint stock mode. The study consists of two main parts:Part Ⅰ:On the basis of field research for some Venture Capital Leading Funds in China, and the vast related literatures both domestically and abroad, and Chinese government’policies and regulations concerning Venture Capital Leading Fund, the paper focuses on systematic review of the achievements and challenges facing Chinese Venture Capital Leading Funds, as well as the success of two overseas Venture Capital Leading Funds under different modes.Part Ⅱ:Construct a mean-variance model with two types of investors, three types of investment assets, and two phases. And then expand this basic model by adding a new market participant—government. The paper analyzes the different impact of joint stock mode and guaranteed financing mode on market participants, investment assets, and social welfare. Finally the paper compares and evaluates the efficiency of different modes of Venture Capital Leading Fund and come to the conclusion that joint stock mode is the most suitable mode to operate Venture Capital Leading Fund in China today, but it is not Pareto Optimal in theory, which proves that guaranteed financing mode is more Pareto efficient than joint stock mode.