Study On Venture Capital Exit Mechanism

In China’s capital market matures, venture capital is taking more and more largerproportion of investments in the capital market and other macro context, this article focuseson venture capital exit mechanism empirical research, analysis of the impact of exitperformance influencing factors. Although the development of China’s venture capitalindustry has achieved rapid development, but there are many problems. According to theChina Venture Capital Yearbook2011"shown, the major obstacle to development ofChina’s venture capital industry is the risk of project overvalued exit, the lack of qualityprojects source, the scarcity of venture capital professionals, macroeconomic uncertainty,institutional The credit system has not yet been established, is difficult to implement taxincentives and other issues. China’s venture capital exit channel is not perfect, somesuccessful investment project does not eject properly, an increase of the uncertainty of theinvestment, improve China’s venture capital exit channels has real economic significance.In this paper, by five chapters.Chapter I: Introduction. First introduces the research background and significance,pointing out the importance of venture capital exit channels retirement venture capitalindustry as well as China’s capital market. From a macro context, analysis of the prospectsfor the development of the venture capital industry in China. Second, the literature review,divided into venture capital exit literature review and venture capital the exit performanceevaluation literature review. Summary The first part is to review the overall study of theexit mechanism, and the second part is to review the the exit performance evaluationmechanism.Chapter II: an overview of the venture capital exit. From the meaning of venture capital,meaning out of the way and the development status, different market segments to compare the five aspects of writing. First described from the point of view of the definition ofventure capital. Venture capital exit has an important role to maintain mobility, sustainabledevelopment of the industry, venture capital institutions follow-up fund-raising venturecapital, effectively avoid losses. The next exit for venture capital in four main ways, namely,initial public offerings, mergers and acquisitions, repurchase and liquidation described indetail. Then the status quo of China’s venture capital, mergers and acquisitions at home andabroad IPO different sections elaborate China’s venture capital exit through the IPOsecurities market: Nasdaq market in the United States, Hong Kong GEM, Shenzhen SMEBoard and the Shenzhen Venture board, and the advantages of each section for detailedanalysis.Chapter III: venture capital exit performance evaluation mechanisms. First introduced theventure capital exit the meaning of the performance and evaluation criteria, the next majorexit effective and exit efficiency analysis of the evaluation index. The exit effectivenessevaluation exit income, exit costs, Exit Price and internal control over incentive; exitefficiency evaluation timeliness indicators out of the market capacity out of the marketscale and exit. And then the evaluation index used in this paper: internal rate of return.Chapter4: Venture Capital Exit Empirical research. The first research hypothesis, thispaper studies the data put forward a five-point assumption, namely: the risk of foreigninvestment institutions to withdraw from the project rate of return is higher than the localventure capital firms; exit through the IPO return on investment is higher than the otherway; venture capital fund management institutions, the larger the risk the higher the rate ofreturn on investment; venture capital firms working the longer, the higher the rate of returnon investment; venture capital firms, the greater the amount of investment, the rate of returnhigher. Next, the data descriptive statistics, and finally the regression results and interpretation. Finally, regression results show that, equity nature of risk investmentinstitutions (domestic or foreign), exit (IPO or otherwise) and investment cycle of venturecapital exit rate of return has a positive correlation; the amount of investment andmanagement of funds amount to exit the rate of return does not correlation.Chapter5: improve China’s venture capital exit mechanism policy recommendations.Firstly, that should be a multi-level capital market system, mainly from the new three-panelconstruction, cultivate and improve the property rights trading market in China and otherrecommendations. In addition, it should be refined in the supporting system should beprimarily to strengthen policy support and cultivate and regulate venture capitalintermediaries, the development of industry self-regulatory organization. Finally, it shouldbe out of the way, try a variety of exit from the flexible use of various investment vehiclesto facilitate investment and asset securitization venture capital exit and recycling to create anew way for both analysis.