Venture Financing Contract Arrangements

The financial contract of the start-up is the cooperative contract between capitalist and entrepreneur where entrepreneur is the central contractor in order to combine produce factor with each other. The entrepreneur has the different contract form to harmonize financing conflict.For example,debt contract get used to using price mechanism which is the invisible hand, and that equity contract get used to using power mechanism which is the visible hand. The market and power are looked upon as two kinds basic harmonization mechanism,so most financial contract either belong to debt contract or belong to equity contract.In fact,the boundary of equity contract and debt contract does not make clear. Modigliani and Miller thought that the financial contract has nothing to do with the enterprise value. Williamson had looked upon the financial contract between pure market and pure power as the riddle of "the choosing interference".The diversity of harmonization mechanism and the significance of trust mechanism had been emphasized by Larsson as "shaking hands". In fact, there are a lot of form of financial contract,for example, related debt financial contract, nonstandard debt financial contract, trade credit,convertible bonds, venture capital contract, angel capital contract and family-equity capital contract.Although scholars gave large attention to the various financial contract, we have never seen a convictive explanation,such as nature, survival mechanism and evolution process of financial contract to this day.The thesis mainly studies the following basic problems. These problems include that how to determine the nature of the financial contract, how to determine the nature of the financial contract of the start-up, which financial contract can be selected by entrepreneur in order to attract investor? what the logic path about evolvement of financial contract of the start-up in China.The basic viewpoints of the thesis are that there is a contract harmonization in the dispart sciety when produce factor belongs to different owner. the nature of financial contract should be on basis of administrative harmonization, power harmonization, price harmonization and trust harmonization; form of the financial contract of the start-up is due to trust harmonization appearing inside price harmonization and power harmonization; different combination of trust harmonization and power harmonization could interpret evolving logic course of equity contract from venture investment,angle investment to family-equity financing; different combination of trust harmonization and price harmonization could interpret evolving logic course of debt contract from related debt financing to informal finance, to trade credit. This order is based on the environment of market from simpleness to complexity,from perfectness to imperfectness.Third, the financial contract of the start-up as a subclass of financial contract neither include the debt contract which is decided by pure-market harmonization,nor include equity contract which is decided by pure-power harmonization. Given pure market and pure power as logic starting pointing of financial contract, they must had the characters of trust due to asymmetric information,uncertainty, asset specificity, cognitive ability of investor. The last conclusion is that the growing path of Chinese financial contract of the start-up is from equity contract based strong administrative harmonization to debt contract based half strong administrative harmonization,to debt contract based half strong market harmonization,to equity contract based strong power harmonization, then to equity contract based half strong power harmonization.The innovative ideas of this thesis are as follows: First, this thesis had a new researchful object.Because it criticized the mainstream idea that the firm is the capitalist's firm,and we thought that the firm is the entrepreneur's firm.At the same time, this thesis had built the financial contract theory based harmonization mechanism,which make us to interpret the nature of financial contract, function and efficiency within the unified framework.Second, this thesis had a new researchful content. Because it had built two-dimension analytical framework of "market harmonization - trust harmonization" and "power harmonization - trust harmonization",which have the stronger convincible to various financial contract and evolving path.Third, three is the innovative method.This thesis combined static analysis with dynamic analysis, academic analysis with empiric analysis,which made theory together with fact,history together with logic.