The Withdrawal Of Venture Capital Decision Research

Venture capital is a kind of resource configuration or one way of investment withhigh-risk, high-return and high growth potentiality. It is also a continuity ofinvestment behavior of which the operating mode is “financing-investing-withdrawing-reinvesting”. The exit of the Venture capital is the vital component. Thecapital exit is the premise of high profit after the Venture capital success and the keypoint of the circulating of capital in the Venture capital. Only after the successful exit,the Venture capital can have an access to another round to realize the capital cycle.Therefore, the risk investing organization and investor should know when and how towithdraw from the investing company and how to arrange the exit extent and exit theright of control, which is the key of realizing the risk investing capital appreciationand capital cycle to promote the sustainable development of Venture capital in ourcountry. It makes realistic significance. In the next decade, reckoned as “goldendecade” for the rapid development of Venture capital, when the hotspot for investmentturn to Internet, cleaning techniques, telecom, value-added business and otherindustries, the resistance of IPO exit seems to be more and more apparent and themerger and acquisition exit tends to be popular. Under such circumstances, we shouldtake the international economy into account to look for the developing chance forChina’s Venture capital in a long run.There are six chapters in the paper. The first part of this thesis is introductionwhich gives a systematic statement about the significance and methods of research,illustrating the related research theories at home and abroad about the exit methodsand exit time of Venture capital. The second part is an analysis about thecharacteristics of Venture capital and the significance of the Venture capital exit, makea brief introduction of game theory. The third part emphasizes on the basic methods ofVenture capital exit and the research of influencing factors. The fourth part is ananalysis of Venture capital in our country, combining with the game theory and model.The fifth part is the recommendations for policy. The sixth part is the conclusion.The paper is conveyed by three methods: the literature analysis, chart interpretation ofthe law and the theoretical and practical research methods. And the researchestablishes the model of Venture capital exit and exit the timing of thedecision-making model to a study mainly from the game point of view. The risk Pareto optimal exit conditions of the investmen is obtained by building the Venturecapitalists and Venture entrepreneur utility function, analyzing the control over thedistribution when the two sides are in the game. When Venture capitalists and riskentrepreneurs choose an effective exit decisions, unable to reach the equilibrium of agame, so it needs to be introduced the distribution of exit right of control to reach tothe optimal decision, That is to say, the ultimate exit decisions are controlled by theside that has the right of control. As for the timing of Venture capital, the initial publicoffering should be put into first priority. And establish a two-stage game model andthe infinite repeated game reputation model, analyze the impact of reputation on theexit time, and come to establish a reputation for balanced conditions. Study comes tothe conclusion that when asymmetric information has a negative impact on Venturecapital, it is an important way to obtain additional financing to maximize the benefitsand future opportunities for seeking a good reputation.