The Empirical Study On Influencing Factors Of The IPO Exit Return On Investment Of Venture Capital Based On VAR Model

With the accelerated process of integration in the global knowledge economy,countries are actively seeking effective ways to promote the economic development.And venture capital as an emerging industry has attracted national attention. It plays animportant role both in promoting the industrialization of science and technology andhelping enterprises. In China, venture capital started in the1980s, and to now havemade some substantial results. Especially after the2009GEM started, the liquidationsand exit of venture capital has a better platform. IPO has become the most important,highest return exit of venture capital in our country. At the same time, in view of thesuccess of venture capital’s exit is to earn high returns as a precondition, andaccompanied by relevant information disclosure of listed companies, the study of IPOexit return on investment of venture capital is of great theoretical and practicalsignificance.The thesis firstly analyzes theoretically of the IPO exit return on investment ofventure capital and its influencing factors, defining the measure of the IPO exit returnon investment of venture capital, analyzing the possible influencing factors fromventure capital firms, venture capital projects, risk control and the other four levers.Secondly it conducted correlation analysis by taking advantage of the relevant threeyears data of venture-backed companies in GEM, finding the significantly correlatedseven factors to the IPO exit return on investment of venture capital, namely venturecapital firm’s share-holding ratio, institutional organizational structure, institutionalpractitioners time, venture enterprise’s ROE, ownership concentration, Shenzhen indexand price/earnings ratio. Thirdly the further analysis is conducted by building a VARmodel on the basis of assuming that all the different venture capital investment projectsare as a single large project which forms time series on the premise of market time,understanding the seven different factors are affected on the IPO exit return oninvestment of venture capital in the influencing strength and duration, finding the IPOexit return on investment responses most rapidly to institutional structure, practitionerstime, ROE and ownership concentration, while the price/earnings release has thegreatest impact on investment returns and the impact of Shenzhen Index and share-holding ratio is relatively small. At last, combined with the empirical results andthe actual situation, some countermeasures are made from the aspects of the externalenvironment and internal operation of venture capital institutes in order to get high IPOexit returns and achieve healthy development in the industry of venture capital in China.