The Return Of IPO Exit Investment And Its Influencing Factors In Venture Capital Investment In China

With the increasingly diversified,liberalized,and technology-based global economic development,all countries are trying to seek effective ways to promote their own economic development.Now that venture capital has become a global phenomenon,venture capital investment is not only capital involved,but can also play an important role in the value-added of enterprises by strategies such as controlling rights and seats on board of directors to supervise and influence the decisions of enterprises.They help broaden the financing channels of enterprises,promote the industrialization of science and technology,and strengthen the economic vitality of countries and regions.China's venture capital industry began in the 1980 s.The launch of the GEM in 2009 provided a good exit path for venture capital.IPO is the highest-return and most popular exiting method for venture capital in China.The exit process is where the core interests of venture capital are located.Withdrawing income is an important indicator to evaluate the success of investment.At present,China's economy is undergoing transformation and upgrading.The comprehensive and thorough research on venture capital is conducive to the efficient financing of start-up companies,to the understanding of the financial micro-market structure,and to the development of national innovation and entrepreneurship.This paper analyzes the factors affecting the IPO exit earnings of venture capital from the macro and micro levels.On the basis of previous papers,this paper completes the theoretical and empirical parts.Firstly,as to theoretical study,the innovation is the improvement of influencing factors.On the basis of previous literature research,through theoretical elaboration,the possible collections of influencing factors are expanded,with distinct levels,covering a wider range.Secondly,Beijing,Shanghai,Guangzhou and Shenzhen are relatively developed areas in China,with a wealth of domestic investment sources and markets,but few studies use it as a sample.The results of this study have realistic reference.Finally,on the empirical side,based on the commonly used linear regression model,this paper also uses the vector auto regressive model to compare and analyze the contribution of the explanatory variable to the exit return and the action time.The full text firstly defines the concept of venture capital and exit return,elaborates the theory of related impacts,and analyzes the factors that may affect the return of IPO exit investment.At the macro level,it considers the impact of economic cycles,industries,and regions.It also focuses on the micro-level research,and subdivides the three dimensions of the characteristics of start-up companies,the features of venture capital corporations,and the selection of venture capital strategies.Secondly,this paper uses data of IPOs from September of 2009 to November of 2017,which were invested by venture capital companies.The data were used to conduct correlation analysis,and then eight influencing factors were found to have a significant correlation with IPO exit return from venture capital,i.e.,the price-earnings ratio,debt capacity,profitability,social network,Employee time,joint investment,shareholding,and investment stage.Thirdly,by building a VAR model for further analysis,to get to the influence of eight different influencing factors on the IPO exit return of venture capital and the duration of impact.The results show that the impacts are ranged from strong to weak,which are business time,shareholding,asset-liability ratio,investment stage,jointinvestment strategy,network connection,net profit rate,and price-earnings ratio.The equity share,business time,net profit rate and investment stage will have a positive impact on the return of investment,in which the share of equity and business time will last longer.Otherwise,the asset-liability ratio and joint investment strategy will have a negative impact on the return of investment.At the same time,the impact of network connections on the return of investment is both positive and negative.Finally,based on the empirical results and actual conditions,from the macroeconomic environment,the organization's own governance and decision-making etc.,we made suggestions on how China's venture capital can obtain high IPO exit investment return,and thus achieve healthy development.