Joint Investment Of Chinese Venture Capital:Bounded Rationality Strategy Against High Uncertainty

Venture Capital(VC,for shot)takes risks to invest the start-up companies with leading technique and promising market performance who lack of launching capital.The VC will get the investment return by the means of IPO,M&A and Repurchase.Facing high risk,the VC has the potential to get high yields and thus acts as a positive role in the development of the high-tech industry.The operation of Venture Capital industry itself deals with certain high risks and uncertainties such as technical risk,management risk,market risk and policy risk.As a way of sharing resources and risks,joint investment between VCs is a common investment strategy to supplement the insufficient of the formal institution.Been developed under the guidance and restriction of the government,the Chinese VC industry forms a unique developing path and morphology that the state-owned VCs occupy the dominant position since the very beginning and the institutional risk turns to be the leading risk.Under the circumstance of the institutional uncertainty,the VCs with distinct property rights perform different joint investment propensities and demands.This study relies on the social network analysis to discuss the formation,structure and relationship characteristics of Chinese VC syndication network.Regarded as an informal institution,we will analyze how the syndication network interacts with the macro policy environment.When it comes to the analysis of the actors' strategy in the syndication network,we introduce “quanzi” theory to sort out the relationship characteristics and interaction rules under the influence of Chinese traditional culture and social relationship pattern.Combining the quantitative and qualitative analysis,the study discusses the joint investment strategy options for actors in different network positions.Through this empirical study,the related theories will be enriched and will help to forms a better understanding of the Chines VC industry.