The Study Of Venture Capital’s Impact On The Company’s Debt Financing

Since late 1980 s, a new kind of financing model entered China. Venture capital,this special financing model was quickly given great attention by government and enterprises. At present, still, the research about the influence of the venture capital on the debt financing capability and term structure of debt financing of innovative enterprises is not that much.To improve the study of the role of venture capital, this paper is devoted to discuss the influence of the venture capital on the debt financing capability and term structure of debt financing of innovative enterprises.First of all, based on the reasons of innovative Small and Medium Enterprises’(SMEs) financing difficulties, this paper shows that with the characteristics of smaller,better growth prospects, high-tech high-risk, innovative SMEs community is more difficult to get credit at banks and other financial institutions because of the asymmetric information.Secondly, this paper theoretically analyzes the venture capital intervention mechanism for innovative enterprises. The mechanism includes four aspects. First, the certification role. According to the signal transmission theory, innovation-oriented enterprises with venture capital background will send a positive signal. Second, the supervisory role. Venture capital institutions can participate in the management and supervision of the innovation-oriented enterprises by share holding. Third, value added services. Venture capital institutions are often able to provide development planning, business ideas, strategic guidance on development and suggestions on internal control system. Finally, in order to prevent the possible moral hazard and adverse selection of principal-agent problems, venture capital institutions will make full use of their information processing advantages, use the methods of joint investments stage investment strategies and help portfolio companies to reduce information asymmetry phenomenon.At last, this paper adopts the empirical methods to test the theoretical analysis.This paper selects the Shenzhen Gem companies during 2010-2013 which are in the participation of venture capital as study sample. This article establishes regression model based on the factors that affect the debt financing capacity, use the shareholding ratio of venture capital institutions as dependent variables and interest-bearing debt ratio, short-term interest-bearing debt ratio, long-term interest-bearing debt ratio as independent variables and draw the followingconclusions:(1) For innovation-oriented enterprises with venture capital background,the shareholding ratio of venture capital institutions has significantly positive correlation with interest-bearing debt ratio;(2) For innovation-oriented enterprises with venture capital background, the shareholding ratio of venture capital institutions has significantly positive correlation with short-term interest-bearing debt ratio;(3)For innovation-oriented enterprises with venture capital background, the shareholding ratio of venture capital institutions has positive correlation with short-term interest-bearing debt ratio, but not significantly.In the end, this article reaffirms the important role of venture capital in the indirect influence on the debt financing area in the capital market. This paper also try to give some countermeasures and suggestions from multiple perspectives on the venture capital institutions, GEM listed companies, government and regulation organizations, hoping to promote the development of the venture capital institutions.Meanwhile, this paper also gives some relevant recommendations for Gem listed companies about debt financing.