The Impact Of The Reputation Of Venture Capital Institutions On Their Capital Operation

Venture Capital(VC)capital operation refers to the allocation of capital to start-up companies by setting up funds,raising capital and equity investment,so as to realize capital appreciation mainly through equity transfer when the venture enterprises are mature or relatively mature.The reputation of venture capital institutions refers to the perception of institutional profitability and resource capability by stakeholders,that is,venture capital companies create value for investors and bring resources to their investment projects.The reputation depends largely on the past performance of the organization.Many studies in financial literature have examined the importance of reputation of financial intermediaries(people or institutions who act as intermediaries or bridges between the suppliers and suppliers of funds in the process of financing in financial markets).As an important financial intermediary,venture capital institutions are also the focus of theoretical and practical circles.Venture capital research mainly involves three subjects: venture investors(including limited partners and general partners),venture capital institutions and venture enterprises.From the theoretical point of view,the research on venture capital in China started relatively late.The research on the impact of reputation of venture capital mainly focuses on the IPO and development performance of the invested enterprises.The research on the impact of reputation of venture capital on the operation and allocation of venture capital institutions is less.For this reason,this paper collects relevant data from 2000-2017 from private equity database,mainly choosing two directions of capital raising and industry selection when allocating funds to study the impact of reputation of venture capital institutions on their capital operation.The empirical results show that the reputation of venture capital has a significant positive impact on the size of fund raising,the reputation of venture capital has a significant positive impact on the number of industry categories of investment targets,and the institutions with good reputation of venture capital tend to invest in emerging industries.Finally,this paper analyses the advantages of reputation to fund operation and the risks of venture capital institutions,and puts forward some suggestions on the corresponding agency problems.