Research On The Guiding Effects Of Government Leading Fund Of Venture Capital

The market-oriented venture capital industry often has the problem of investing late-stage companies,making it difficult for a large number of early and mid-stage enterprises to obtain financial support.This is mainly due to the high failure rate of early and mid-stage enterprises and the great information asymmetry with respect to external investors.Similarly,the positive externalities of high-tech companies have not been adequately supported by VCs.Therefore,many countries tend to promote the development of these two types of enterprises through the establishment of policy-oriented funds to encourage the venture capital industry to invest in early-middle-stage and high-tech enterprises.This kind of police-oriented fund establishes police-oriented sub-fund jointly with the social capital to realize the goal of mobilizing social capital to support early and mid-stage and technological enterprises.At present,the academic circles in our country focus very less on the guiding effect of police-oriented funds in our country,and most of them concentrate on whether the police-oriented funds expand the capital supply of the VC industry,and few of them discuss whether the policy-oriented funds promote the investments in the middle stages and high-tech enterprises.This paper aims to explore the guiding effects of our police-oriented funds from the aspect of whether police-oriented sub-funds are more likely to invest in early-middle-stage and high-tech enterprises than purely private funds.Based on the 16227 investments data from the database of QingkePE,the paper finds that policy-oriented sub-funds in our country are more likely to invest in the seed stage and early stage companies than the purely private funds.It is also more likely to support high-tech enterprises,thus confirming the guiding effect of policy-oriented funds on the investments of early-mid-stage and high-tech enterprises.In addition,this paper finds that the guidance effect of promoting the investments in technological enterprises overflows to other private funds managed by the VC agency that operates a policy-oriented sub-funds.However,the guidance effect of supporting the early and middle stage companies has no spillover effect.Furthermore,based on the double-difference model,this paper verifies that the spillover effect of guiding the investment in S&T enterprises is due to the sub-fund's incentive policies improve the ability of its vc agency to invest in S&T enterprises rather than simply selecting the vc agency which is experienced in investing in high-tech enterprises.Although the policy-oriented funds did not cultivate the experience of sub-fund's vc agency in investing in early and mid-stage enterprises,China's policy-oriented funds are considered successful taking the unavoidable high failure rate of early investments.The main contribution of this paper is reflected in two aspects:First,it successfully evaluate the guidance effect of our country's policy-oriented venture capital funds from the micro-level aspect based on a large samply of 16227 investment events.Second,the long-term influence of the guidance effect of policy-oriented funds on vc industry is examined via double difference model.