A Study On Risk Identification, Risk Evaluation And Risk Prevention In Venture Capital Project

The venture capital investment with high risk, high growth and high expecting returns, plays a very important role in the development of new technology. But while encouraging the venture capital investment, we must identify its risk, evaluate its risk, and properly take measures to minimize or prevent its risk. Therefore, it is practical and theoretical forus to inquire systematically into the risk in venture capital project.Firstly, the paper classifies the risk factors in venture capital project, and expounds the identification of key risk factors from data collecting, variable measuring, analyzing methods, etc. In the course of data collecting, measures are taken to make sure the data are reliable and effective, including designing the questionnaire scientifically, and issuing and retrieving questionnaire strictly. In the variable measuring, consulting to related theories and verified research domestic and international, we establish the measurement of dependent variables and explanatory variables to ensure the validity of the variables. In the test of measure model, the results show the reliability and validity of the variables is high. In the course of analyzing, we test the nested-model by using Structure Equation Model, and the result verifies the nested-model is more fit with the data. With path analysis, the paper analyzes the direct and indirect influence of strategy, production and markets, financing and human factors on investment performance, and also analyzes the influence on investment performance because of the interaction among these factors. The findings show the investing environment, the managers' ethical risk, agent risk, managing team's coordinating ability, plan for funds demand, capital exit, etc, are the key factors that influence venture capital investments.Then on the basis of summarizing and reviewing risk evaluation technique, the paper evaluates the merits and demerits of current methods. It states what characteristics or requirements risk evaluation methods should have in venture capital projects. In view of the limitations of objective-oriented risk evaluation, the paper puts forward risk activity-oriented evaluation techniques - risk matrix techniques. It explains what unique function risk matrix techniques perform in project risk evaluation. Moreover, based on the key factor identification, the paper gives a detailed introduction with examples to risk matrix.Finally, the paper puts forward the principles and strategies of risk prevention in venture capital project. It expounds the building of the dynamic prevention system from the trigger principle, barrier analysis, and multiple defense system. It also makes an analysis of root causes retrospection to project risk by using the CREAM retrospection analysis. Furthermore, it discusses the concrete control measures to different risk factors.