Research On Venture Capital Withdrawal Mechanism Based On Its Cycle

Science and technology is the first productive power .Science and technology can promote the development of economy, but it is mainly realized by technology creativity, especially by hi-tech achievements transferred into commodities, i.e. by science and technology pioneering . But the indnstrialization of hi-tech achievements can only be realized by the combination of hi-tech achievements and capital. Venture capital supported by creative circumstance, capital market, venture capital mechanism just embodies the combination of capital, technology, administration and pioneering work creative spirit .It is a modern mode of supporting creativity and pioneering work, developing, hi-tech industry. The experience of western developed countries has already proved venture capital has a great promotion on economy. "NEW ECONOMY" in America is an obvious example for it.As the result of financial system innovation ,venture capital has its unique characteristics: Firstly, it is a circular investment. The whole course can be divided into three passages— collection, investment, retreat, and it goes endless cycle according to the order of "collectionâ†' investmentâ†' retreatâ†' recollection" So circulation is the key and core of venture capital .Venture capital can only reproduce and gain its benefits in its cycles. Once it can't circulate, it fails. Secondly, it is a cultivable investment rather than an industrial investment and its profit comes form transferring stock of hi-tech enterprises rather than investment of fixed capital and floating capital. So venture capital needs an effective withdrawal mechanism and the mechanism is an essential requirement for capitalists to withdrawal their capital In a word , circulation is the most essential for venture capital and withdraw is the key to ensure the smooth cycles. So withdrawal mechanism lies in a core position in venture capital. But at present, in our country, compared with western developed countries, venture capital's development is still in initial phase and its influence on economy increase is not notable. There are many reasons for it, but the most important is lacking of effective withdrawal mechanismAccording to those above, based on venture capital's circular characteristic, using...