An Empirical Research On The Relationship Between Entrepreneurs’Characteristics And Allocation Of Control Rights In Venture Business

Nowadays, Venture capital plays a more and more important role in China, since it helps improve the growth of high-tech venture business. Due to the information asymmetry and the conflicts of benefits, the entrepreneurs and capitalists need to negotiate for the allocation of control rights in venture business. Since different kinds of entrepreneurs have different needs for the control rights and will have different considerations for decisions, the allocation of control rights between entrepreneurs and capitalists has a close relationship with the entrepreneurs’characteristics.The study focus on the relationship between entrepreneurs’characteristics (gender, age, education, professional title, political background, working experience heterogeneity and post working enterprises) and allocation of control right which is measured by the venture capitalists’shareholding. The study chooses companies listed on ChiNext whose top ten shareholders include venture capital institutions as the research object. With statistical methods, the result shows the entrepreneurs’ professional title, political background, working experience heterogeneity has a significant positive correlation with the VC shareholding; while the entrepreneurs’ post working enterprises number has a significant negative correlation with the VC shareholding. The research also implies, when the companies performs very well, the entrepreneurs will have more control rights; otherwise, the capitalists will have more control rights.