Venture Capital And Finance Innovation

With the calling of the most important proposal in the Chinese People' s Political Consultative Conference in 1998, Chinese venture capital had ever been made rapid progress. But it had not sustained too long, after the bubble bursting of NASDAQ market, venture capital in China also gets dreary, it begins improvement slowly until recently. But in this environment, the people who is engaged truly in venture capital, including the industry circle and the theory circle, begin to explore rationally the way of venture capital development in China. For this reason, this thesis attempts to analyse venture capital from finance innovation and hope it can arouse more profound discussions in the theory circle.The thesis consists of six chapters. The preface introduces briefly the background and the value of the thesis. Chapter one mainly expound the concept, birth, progress , and key character of venture capital. In the end, it analyses the significance of developing venture capital according to Joseph Schumpter' innovation theory. The second and the third chapter analyse the supply and the demand of venture capital in the market. Chapter two, after briefly introducing the general sources of venture capital, expounds the Chinese probable sources of venture capital, and suggests to make great efforts to develop sources from enterprises, pension,insurance fund and other institution investor in the nowadays. Inthe chapter three, the first section analyses the life cycle of venture enterprises and the demand rule to capital in every period of it; the second section analyses the demand to venture capital in China, which includes the initial establish of prosperous and new, small enterprises and the innovation of the old enterprises.Chapter four expounds the finance mechanism of venture capital according to the theory of information economics and transaction cost. The first part of this chapter introduces the theory of information economics, the theory of transaction cost and finance way. The second part expounds the finance innovation in venture capital, and demonstrates it is a progress of finance in the time of knowledge-based economy. Chapter five illustrates the venture capital withdrawing from venture enterprises, and proposes the mainly way of which should be M&A (Merger and Acquisitions) in the present situation. The last chapter returns to the angle of enterprises finance to demonstrate the importance of developing venture capital ,and finally gives the countermeasures after analyzing the current situation and questions.