Research On The Effect Of Venture Capital On The IPO Of Growth Enterprise Market

The financing problem of small and medium-sized enterprises has long been one of the most concerned problems by theorists and governments, The capital market gradually leads more small and medium-sized enterprises strive to seek equity financing, IPO is the most effective mode of financing. Venture Capital is an important financing channel for small and medium-sized enterprise and IPO is the optimal exit way of Venture Capital, so Venture Capitalists will deeply involved in and significantly affects the IPO of Venture Companies. For a long time, academics have different views on the effect of Venture Capital played on the IPO of Venture Companies. In different securities market, Venture Capital plays a different role on the IPO process of Venture Companies. Therefore, according to different empirical statistics, scholars have put forward the’certification’,’screening/monitoring’and’market power effect’and’adverse selection/grandstanding effect’ theories.We select the listed companies on the Growth Enterprise Market by31December2011as a research sample, on the theoretical basis of ’screening/supervision effect’,’certification effect’and’market power effect’ theories, use the matching sample comparison and multiple regression analysis to study123group sample enterprises.By comparing the performance before IPO, IPO performance and performance after IPO of the group sample enterprises, we want to verify whether foreign different theoretical models are valid for such an emerging capital market of Growth Enterprise Market. Besides, this article also study deeply whether different characteristics of Venture Capital institutions have a significant difference of influence on the Venture Companies by studying on the sample of Venture Companies. In addition, based on the theories of’supervision effect’ and ’value-added role’, this article also has a study on the characteristics of participation of Venture Capital institutions on the Venture Companies, and study the effect of these characteristics of participation on the performance before IPO of these Venture Companies. Thus this article has a more comprehensive and deep research on the effect of Venture Capital on the IPO of Venture Companies.We founded that:①the overall, our country’s Venture Capital institutions can play a good role of’screening effect’ in choosing better enterprise to invest, but after the investment, the characteristics of participation in Venture Capital institutions exists a short-term investment characteristic, the participation management level of Venture Companies is lower, Venture Capital institution do not play a good role of ’supervision effect’ in promoting the management level and business performance of the Venture Companies.②enture Capital can play a role of’certification effect’ and’market power effect’ partly When the Venture Companies IPO, Venture Capital can send a positive signal to the market, indicate that Venture Capital institutions have a positive attitude to the Venture Companies future to the majority of investors, so the Venture Companies are easier to get the approval of investors, which can proved by that venture-backed enterprise has a higher price-earnings ratio, lower issue costs and higher quality of the underwriters, etc.③rom the view of Venture Capital institutions attributes, high-reputation Venture Capital institutions are better able to play a role of’certification’ and ’screening/supervision’effect function to produce a more positive effect on the IPO of Venture Companies, while there is no significant difference of different background Venture Capital institutions on the IPO of Venture Companies.Finally, according the study conclusions, this article propose some constructive corresponding countermeasures and suggestions from three angles of the venture capital firms, small and medium-sized enterprises and the relevant government departments.