Study On The Investment And Financing Matching Between VCs And VEs Based On The Two-sided Matching Theory

Venture Capital(VC)is regarded as the science and technology incubator,resource allocation,economic growth engine,and so on.In fact,VC is the product of social economy development to a certain stage,and the financial innovation service which adapting to the current economic development of our country.In order to develop the venture capital market in China,many policies and regulations have been introduced from the central to the local,and the relevant supporting system is built and perfected in practice.Such as the regional equity exchange has been established to promote trade of venture capital and venture enterprise,the government guide fund has been established,tax incentives has been carried out,etc.But both in theory and in practice,VCs have an instable effect on Venture Enterprises(VEs).In practice,VCs have incubated many star companies such as Apple,Alibaba,and so on.but also have been regarded as barbarians at the gates of VEs.It is a frequent occurrence that VCs strongly interfered in the business management,or even driven the founder of the enterprise out of the VEs.When VCs and VEs achieve win-win cooperation,the two sides can gain both fame and wealth.But once the cooperation is failed because of the project failure or poor business management,not only the property and reputation of VCs and VEs will be lost,but also the development of venture capital market will be adversely affected.In theory,due to the uncertainty of the venture project itself and the information asymmetry between VCs and VEs,and the influence of the external environment,there may be adverse selection and moral hazard problems in both VCs and VEs,which will lead to the unstable cooperation of VCs and VEs.From the results of the literature research,venture capital has both good impact and bad impact on venture enterprise performance,technology,corporate governance,IPO performance and other aspects.From the analysis,It shows that the further study on the internal mechanism of win-win cooperation between VCs and VEs is needed.Then,based on the theory and the actual situation,this paper studies these problems with Two-sided Matching theory which contribution is mainly owen to Shapley and Roth,and focuses on the following three aspects of innovative research,and gets the corresponding results:Firstly,this paper researches the special decision-making of two-sided matching between VCs and VEs based on ordinal number information and cumulative prospect theory.Since the stable development of venture capital market is decided by the stable and efficient two-sided matching between VCs and VEs,this paper will study the decision-making method of two-sided matching between VCs and VEs to improve the the allocation efficiency of venture capital market.In the course of study,the ordinal number information is designed as the decision-making basis for both VCs and VEs,because it is easy for both sides to sort the transaction object with the transaction willingness.The cumulative prospect theory is used to measure the risk attitude of VCs and VEs.Then,the multi objective optimization model is constructed.Finally,an example is used to verify the validity of the model,which improves the objective and scientific of the matching decision.Secondly,this paper innovatively designed the mutual evaluation index system of VCs and VEs.Based on the general principles of index design,the actual situation of VCs and VEs in our country,this paper designed 8 major indicators for VCs to evaluate VEs,which are the investment return,enterprise risk,entrepreneur quality,enterprise technology level,market competitiveness,investment environment,investment recovery period,and the ownership structure.And 3 major indicators is designed for VEs to evaluate VCs,which are investment intentions,investment strength and investment strategy.Finally,This paper empirically studies the actual situation of two-sided matching between VCs and VEs which listed in Shenzhen GEM during 2009 to 2011,and the allocation efficiency of venture capital market.The empirical results show that VEs funded by more powerful VCs are better in performance and returns,and the performance of VEs which are invested by syndication of VCs is worse than that of VEs invested by single VC.However,when VEs are invested by more than one VCs who have good reputation and strong investment strength,or by single VC who has a good reputation and strong investment strength,they are significantly better in comprehensive performance and returns.Then,all the results suggest that China's venture capital market is effective.Moreover,we find that some of the characteristic indexes of VCs and VEs,such as VEs' market competitiveness,technology,and VCs reputation,have significantly positive correlation with matching value;Share ratio of the top three shareholders has a significantly positive correlation with returns;but the indexes of VC's equity ratio,joint investment strategy,and preferential policies have negative impact on matching value.In terms of research methods,first,this paper uses the research method of integrating theory with practice;second,scientific management theory unites with optimization decision model method;third,empirical research methods is combinated with normative research methods.