Exit Mechanism Of Venture Capital

China’s Growth Enterprises Market(GEM) was born in2009. Since then, China’s venture capital industry has entered into a totally new development stage. Meanwhile, influenced by series of domestic and international factors, China’s venture capital exit mechanism has changed dramatically, so that the study on it is becoming more and more important both in theoretical and practical field. To this end, this paper aims to construct a general analytical framework for venture capital exit mechanism, then use it as a tool to analyze the China’s venture capital exit practice.This paper is constituted by introduction and text. The introduction states the research background, significance and method, and outlines the whole structure of the paper. The main body of the paper contains six chapters. The overview of venture capital is listed in Chapter1, and the general analytical framework for venture capital exit mechanism is constructed in Chapter2. Then, under the framework, China’s venture capital exit profile, exit ways, and exit market environment are analyzed based on data and practices materials in Chapter3,4and5respectively. At last, conclusions are summarized, and specific policy recommendations are offered in Chapter6.Based on the research, four conclusions are drawn in the paper:Firstly, the general analytical framework for venture capital exit mechanism should include four factors:exit time point, exit ways, exit return and exit market environment. Also, the analysis on China’s venture capital exit status quo should be so. Secondly, China’s venture capital exit profile goes well when it is measured by exit size, exit return and exit industrial®ional concentration. But it also faces problems:the capital operating time is reducing, and the exit geographical disparities is enlarging, etc. Thirdly, among the twelve exit ways, the IPO in GEM is the best way by now, and Equity Transfer in National Equities Exchange and Quotations(NEEQ), or Assets and Equity Exchange(AEE) will be the most promising way. Finally, a fourth board with regional, normative, and flexible features should be established to improve China’s multi-layer capital market system, where China’s venture capital can exit in various way.At last, this paper presents a four-point proposal:To narrow the geographical differences of the venture capital, and take full advantage of the venture capital to develop the key industries. To optimize the institutional arrangements, reversing the venture capital’s short-term operation trend. To rationalize the capital sub-market’s positioning and gradually improve the multi-layer capital market system. To cultivate the spirit of innovation, and build credibility mechanism to create a favorable venture capital climate.