Research On Dynamic Allocation Of Venture Enterprise Actual Control Right

Currently,China economy is undergoing profound readjustments.Facing the gradual disappearance of advantages from low labor cost and export,China PCC puts forward duly innovation strategy,advocating creation leading to developments,giving a big wave of the innovation of public business.Innovation is viewed as a new engine to economy growth.However,starting a business is not costless at all.Even if a business is successfully established,such a strange phenomenon often occurs that the founder is pushed out by the business he created,which prevents footsteps of founders.That Steven Jobs is taken place by Tim Cook to become CEO of Apple Inc.is one of the most famous cases.How founders are pushed out by their own business raises the thinking about enterprise actual control allocation.Academia has researched on this and found some results.But most are based on a fixed time from a static point of view.Seldom of them frees time variable and takes the allocation of actual control right as a continuous process.Intended to make up for the gap,our research tries to apply enterprise life circle approach and explores results of the allocation of actual control right at different stages,thus presenting the dynamic allocation process thoroughly.Though analyzing new venture enterprises' financing motive and behavior pattern,and combining the SWOT analysis approach,we find that founders are more inclined to choose equity financing,including initial risk investment and later stock financing.Qualifying external capital to enter the enterprise,equity financing induces the fight for enterprise actual control.In order to present the fight process among principles,first of all Maximization of Utility is applied to confirm actual control optimal allocation share when risk investment agreement is made at the initial stage.Then based on renegotiation capacity from financing decision-making,property exclusive,state of operation and information advantage,bargaining mechanism is used to simulate the dynamic games among principles.Through analysis,we found that at the initial and growth stage,founders take control of the enterprise by their owned funds and specified human capital.And at maturation stage,centralized financing decisions make it easier for shareholders to obtain enterprise actual working control.Besides,relatively recentralized financing decisions,good operation state and information advantages support founders continue to take control of their enterprise.However,when enterprise enters recession stage and faces insolvency,creditors gain the control over the enterprise through their exclusive debt capital and priority of compensation given by Enterprise Bankruptcy Law.In addition,we divide different life cycle stages of GEM listed companies according to their operation performance.Through factors analysis,aggregative indicator of enterprise performance is established and positive analysis is made on the relevancy between aggregative indicator of enterprise performance and shareholders,board of directors and managers.And according to these results,related suggestions are made to help founders from being pushed out by their own business.