Two-stage Venture Capital Decision-making Research Of Venture Capital Project Based On Real Options

Based on the problems of adverse selection and moral hazard between venture capitalists and venture entrepreneurs,this paper constructs the two-stage venture capital decision-making research of venture capital project based on real options and considers the capital operation process of VC two-stage investment.In the first stage of venture capital,given the high uncertainty of start-up projects,venture capitalist often makes the decision after meditation.During start-up period of the project,VC will set a certain period to avoid additional management efforts;therefore,VC plays more of the role of “angel investor”,which invests a certain amount of capital for the startup project without paying management efforts.EN plays the role of “professional manager”,which pays out certain management effort to obtain the favor of the next stage of VC.In addition,by comparing and analyzing the influence of EN's capability level on venture capital projects under the two states of information symmetry and information asymmetry,it is concluded that entrepreneur could be lazy to some degree.In the second stage of venture capital projects,the project enters the operation period,and VC begins to pay out some management efforts,EN also invests some funds.By equity negotiations,the two sides complete the signing of the optimal financing contract;In this stage,we use emotional factors to describe the interaction between VC and EN and use numerical simulation to demonstrate the impact of emotional factors on investment opportunity value and critical value of the project.We show that:(1)In the initial stage of the venture capital project,based on the static comparison analysis of the moral hazard problem between the venture capitalist and the risk entrepreneur under the information symmetry and information asymmetry,we analyze that use the optimal financing contract to stimulate entrepreneur,and verify the rationality of the “incentive-punishment” mechanism;(2)For the first stage of the venture capital project,we divide EN's efforts into “good efforts” and bad effort",through numerical examples,it is concluded that EN prefers to choose "bad effort" and concludes that entrepreneur could be lazy;(3)Emotional factors can effectively reduce the cost of VC and EN,and increase the value of the project's investment and accelerate the incubation rate of venture capital projects.