The Effectiveness And Mechanism Of Venture Capital Guiding Fun

It is the critical moment for industrial transformation of China,and economic growth under the "new normal" is also realizing the transition from "investment-driven"to "innovation-driven".A large number of innovative ideas and technologies produced by start-up companies,are one of the decisive factors for the successful transformation and upgrading of the economy,while the venture capital,as the main financial supporter of startups,plays a key role as well.However,due to the externality of innovation and the low liquidity of venture capital,the allocation of venture capital was generally irrational.To regulate the venture capital allocation,within the past two decades,Chinese government injected policy funds into the venture capital market by setting up government guiding fund of venture capital.It is demonstrated that Chinese government guiding fund of venture capital has taken shape in terms of the scale of funds and the degree of participation.Thus,clarifying the influence of guiding funds on all aspects of Chinese venture capital market is meaningful to comprehensively analyze the policy effects,and has important practical significance as well.This article examines the guiding fund's attraction to private capital and its leading role in the direction of institutional investment,and comprehensively measures the guiding effect of the guiding fund.Besides,in the view of corporate innovation and initial public offering(IPO)underpricing,the role of the government leading fund of venture capital on the corporation performance of the post-investment activities is studied.This aims to investigate whether guiding funds can make venture capital more effective in serving the development of entrepreneurial enterprises.Based on the above research,this article has obtained the following conclusions.Firstly,in terms of the promotion from the government guiding fund on the injection of the private capital,the research found that:(1)The guiding fund not only attracts private venture capital in the same round of financing,but also stimulates other companies' participation in subsequent financing.(2)The extent to which the promotion on private venture capital in subsequent financing depends on the time interval between the subsequent round of financing and the first round.(3)Compared with state-owned management institutions,the guiding fund managed by non-state-owned institutions is more likely to promote the private venture capital.Secondly,as for the investment paths of the venture capital institutions,the main findings are as follows:(1)The guiding fund directly increases the new investment of the equity participation institutions in the high-tech industry,while leads the "companion effect"among the venture capital institutions in the high-tech sector indirectly.(2)In regions where the venture capital industry is underdeveloped,the direct influence of the guiding fund in the high-tech field is weaker,however,the leading position of peer institutions supported by the guiding fund in the "peer effect" is even greater obvious.Thirdly,after studying the impact of venture capital on corporate innovation and the role of the leading fund,it is concluded that:(1)The venture capital has generally advanced the corporate innovation capabilities,but the impact turns out to be significantly different according to the institutional shareholding ratio.When the institution's shareholding ratio is at a low or high level,venture capital promotes the company's innovation capabilities,while,on the contrary,venture capital inhibits the corporate innovation if the institution's shareholding ratio is at a medium level.(2)The guiding fund have a positive impact on the promotion of venture capital on the corporate innovation,which is more pronounced when the institutional shareholding ratio is at a medium level.(3)The mid-level holding level range,where venture capital inhibits corporate innovation,can be shorted with the benefit of guiding fund,so that the positive impact on corporate innovation can be expanded.Finally,with regard to the impact of venture capital on IPO underpricing and the role of the leading fund in their relationship,the results are:(1)The venture capital plays an insufficient "authentication role" in the process of IPO pricing,yet plays an obvious "speculation role",resulting in the rise of IPO underpricing.(2)Although the guiding fund can be able to restrain the increase of IPO underpricing by venture capital as a whole,it cannot be positive in all the paths that venture capital affects IPO underpricing.The guiding fund not only enhances the"certification role" of venture capital,but also strengthens its "speculation role".(3)Venture capital associated with the guidingfund also has a "weakening effect",which can reduce the level of IPO underpricing in a strong regulatory environment.This article expands the research perspective from the guiding effect to the role of guiding funds on the post-investment impact of venture capital.It enriches the understanding of the role of guiding funds in Chinese venture capital market and contributes to a more comprehensive grasp of the policy effect of the guiding fund.Not only the final conclusions provide theoretical support and empirical evidence for the implementation of the guiding fund policy in the current environment,but also lay a relevant basis for the Chinese government to further optimize and regulate the operation mode of the guiding fund.