Research On The Contract Design Problem Of Venture Capital Union

Innovation is the soul of a nation. Since the reform and opening up, innovationhas played enormous impact on China’s economic development which is mainlyreflected in promoting China’s economic growth, improving the material standard ofliving in the urban and rural areas, solving employment problems and so on. Domesticresearch on innovation and entrepreneurship achieves a new height and the centralgovernment and local governments have attached great importance to innovation andentrepreneurship making them to the height of national strategy. However, a keyfactor of whether the new high-tech enterprises can commercialize the scientific andtechnological achievements is to obtain venture capital. The newly built enterpriseshave difficulties in financing for they have a great deal of uncertainty and risks. Fromthe point view of venture capital joint investment, this paper studies how to makefunding easier for newly built enterprises.Introduced in China since the1980s, venture capital plays a very important rolein China’s economic development and promoting the commercialization of thescientific and technological achievements. As an integral part of the modern financialsystem, venture capital can well blend capital, technology and managementexperience, change a lot of good ideas into reality, play an important role inpromoting improvement of living standards. This paper first analyzes the financingdifficulties of newly built enterprises and reviews domestic and oversea researchliteratures and then resolves the financing problems of the newly built companiesform the point view of venture capital joint investment. Beginning with the instabilityof the venture capital alliance, this paper studies the venture capital joint investmentand its contract design using mathematical analysis and comparative analysis. Thedesign idea of venture capital joint investment was obtained. It aims to enhancemutual trust between the various members of the venture capital alliance, optimizeinvestment decision-making, promote the development of venture capital investmentso as to make financing easier for the newly built enterprises and promote thecommercialization of the scientific and technological achievements.