The Influence Of Internal And External Factors On The Withdrawal Of Venture Capital

Venture capital(VC)institutions have become boosters for many start-ups.Although starting late in China,venture capitals(VC)have shown rapid development in recent years and helped the emergence of unicorn enterprises such as Meituan,Mobike Bicycles and Ant Financial Services.Since the exit of venture capital is an important part that affects the healthy development of itself,it is of great significance to study the driving force and the real motion of VC exit behavior in the current context.Many existing studies use indices such as the number of successful investments and the number of IPO/MA projects to estimate ability.However,these indicators may overestimate their ability because their participation in late-stage investments.In this paper,it is believed that VC’s investment ability is more reflected in the excavation and cultivation of early-stage projects,and therefore this paper innovatively proposes to measure VC’s ability based on the criteria of ‘whether it has invested a unicorn at early stages’.Market activity is measured by the total number of VC events in every year.Investment and exit events from 2011 to 2017 of 91 VCs are sorted out.Based on WLS regression,Logit regression and Cox survival analysis,it is empirically concluded in this paper that: 1)High investment ability and high market activity have positive effects on investment returns,and the impact of the latter is relatively greater;2)Investment ability has no regulatory effect on the relationship between external market and investment return.However,early-stage investment and shareholding ratio have regulatory effects on the relationship between ability and investment return;3)The return rate of VCs with state-owned background are higher than those without state-owned background,while being state-owned or not has no regulatory effect on relationship between ability and investment return,which indicates that current state-owned VCs have been more marketized;4)VCs with high ability are more prone to conduct phased investment.Meanwhile,they can accelerate the follow-up investment process as well as exit earlier than those with inferior ability.