The Effect Of Venture Capital In NEEQ Corporate Governance

The effect of venture capital on the level of corporate governance has been the hot spot in theory research.In the past few decades,scholars did a lot of research on the relationship between venture capital and corporate governance both in domestic and foreign,and got many valuable results.However,the results of venture capital on corporate governance are not always consistent because of some interference factors like environment,stock markets,enterprise scale,investor background and so on.Since 2013,NEEQ has expanded to the whole country;many SMEs choose to list on new ‘three board' with the help of venture capital.This is a golden opportunity for us to study the venture capital's effect on SMEs.The distribution of company control and the nature of commissioned-agent relationship between the owner and the operator depend on the equity structure.Board governance is the most important part of corporate governance,the member of board decides the board's efficiency and board's independence.In NEEQ,Venture capital focuses on this high-tech company which has growth potential by suppling development funds and recruiting external professional managers.After the prophase investment,Venture capital can supply management consulting,technology import,industrial M&A and other value-added services for the company and finally reflect in the ownership structure,efficiency of governing boards and corporate internal governance.This article is based on the framework of the value added of enterprise theory.Firstly,we reviewed the venture capital and corporate governance.Then,we analyzed the Fortune Capital's impact on the corporate governance of 4Space from equity structure,board structure and senior management incentive and checked the effect of Fortune Capital's value-added services in4 Space corporate governance.In addition,we created a corporate governance index to test that there is a significant difference in corporate governance or not.Through the case analysis that we drawn some conclusions that Fortune Capital is not a short-term arbitrage institutional investor,but adheres to long-term value in the NEEQ which concerns the efficiency of company governance.And other institutional investors can draw lessons from this model which Fortune Capital supplies social resources and professional management consulting for invested companied in last 5 years in order topromote invested company's corporate governance efficiency and operational performance.In additional,further sample tests prove that there is a significant difference in the corporate governance of the companies which are backed by venture capital or not.Finally,combining the results of the analysis,we give some advice on SMEs' corporate governance.