Does Venture Capital Focus On Enterprise Innovation Ability?

The report of the 20 th National Congress of the Communist Party of China clearly put forward that China should actively implement the strategy of innovation-driven development,constantly develop new fields and new tracks in practice,and strive to shape new growth drivers and new advantages is an important policy direction of building China into a great modern socialist country in an all-round way.Enterprises are the core micro-entities of innovation,so promoting enterprise innovation is the key to accelerate the implementation of innovation-driven development strategy.However,enterprises are faced with high risks and uncertainties when carrying out innovation activities,so they need a lot of financial support.In addition to their own funds,the innovation behavior of enterprises needs the support of the capital market.Venture capital,as a kind of long-term equity investment that tends to invest in high-risk projects and innovative companies in order to obtain high returns,is one of the important capital sources for enterprises to carry out innovative activities.Practice shows that venture capital is not "love investment",it needs to go through a strict screening process in the selection of investment targets,then will venture capital pay attention to the innovation ability of enterprises in the screening beforehand? Are enterprises with strong innovation ability more likely to get venture capital? Answering this question is of great practical significance to promote enterprise innovation and improve the investment efficiency of venture capital institutions.In order to answer this question,this paper takes 377 enterprises listed on the Science and Technology Innovation Board up to December 31,2021 as the research object,selects the venture capital events from 2017 to 2021 as the research sample,and studies whether venture capital prefers innovationoriented enterprises in the pre-screening stage based on the above panel data.Analyze the relationship between enterprise innovation and venture capital possibility,investment amount and post-investment valuation.This paper first reviews the research results of previous scholars in the field of enterprise innovation and venture capital,and then carries out theoretical analysis and empirical research on the research topic of this paper.In terms of theoretical analysis,based on innovation theory,enterprise financing theory,information asymmetry theory and signal theory,this paper analyzes whether venture capital prefers innovationoriented enterprises in the pre-screening stage and puts forward relevant research hypotheses.In terms of empirical research,based on the venture capital events of 377 listed enterprises on the Science and Technology Innovation Board during 2017-2021,this paper constructs a panel data regression model for empirical analysis.The following conclusions are drawn: Venture capital institutions have a significant selection effect on the listed enterprises on the Science and Technology Innovation board.In the pre-screening stage,they prefer innovative enterprises.The more innovative enterprises are,the more likely they are to obtain the investment from venture capital institutions.Finally,combined with the research conclusions,this paper puts forward the following research implications: first,actively guide the capital of venture capital institutions to invest in technology innovation-oriented enterprises,build a communication platform between venture capital institutions and innovation-oriented enterprises,and give play to the positive role of capital market in promoting scientific and technological innovation;Second,enterprises should strive to improve their innovation ability,actively carry out innovation activities and increase innovation input,which is not only conducive to their own development and promote the development of national economy,but also the strong innovation ability of enterprises can send positive signals to venture capital institutions,attract venture capital institutions to invest,relieve the financial pressure of enterprises and obtain professional institutional guidance.Third,venture capital institutions should continuously enhance their professional ability and judgment,through prior screening,invest funds in the most efficient places,so that the most promising scientific and technological innovative enterprises can obtain financial support and professional guidance;Fourth,we should further improve the construction of China’s multi-tiered capital market system to provide a high-quality market environment for venture capital and listed enterprises.