Research On Balanced Score Card In The Application Of The Venture Capital Due Diligence

After suffering from the attack of international finance crisis in 2008,all nations,districts and even enterprises started thinking about their own model of development.Several developed countries has changed their economic development model from indicator driving model or investment driving model to innovation driving one gradually.Therefore,in order to realize the economics development transformation,China must turn to innovation driving model in the new economic background both domestically and internationally.The national strategy “All People Entrepreneurs All People Innovators” has brought tremendous opportunities for the development of venture capital.Considering that the venture capital market is highly information unbalanced,the venture capital institution must conduct due diligence review to the invested projects.It is significant job obligations for venture capital companies to figure out how to carry out due diligence review and how to judge whether the project is worthy investment or not after the due diligence review.The author has been encountered many views about the roles of financial indicators.Some people thinks that financial indicators matter and deserve careful studies.Instead,others think financial indicators are not important because they represent the history of an enterprise and can not be reference for the future.However,investment is for the future which the history information can not have impact on,so the financial indicators do not deserve much attention.How to define the relationship between financial indicators and non-financial indicators has been a physical problem in the practice of due diligence review on venture capital projects.Though the Balanced Score Card is a tool of Performance Management System,it can appraise of enterprises' future strategies from multi dimensions including the angles of Financial,Customer,Internal Processes,Innovation & Learning,while the future strategy of an enterprise is what the venture capital institution concern most.Therefore,this paper is to study how to use the dimensions of the Balanced Score Card system to design a scientific model accordingly to appraise the results of due diligence review properly,which will guide the decision of investment strategies.