Analyses The Mechanism Of Venture Capital

Venture Capital investment has developed rapidly since the 1940s. Nowadays, with the international competition on technology, venture capital investment has nurtured the growth of high technology and entrepreneurial communities resulting in significant job creation,economic growth and international competitiveness.Suzhou which is one of the quickest development cities in China, in order to expedite industrial restructuring and technological developments, to promote the economic development,must promote high-tech industry development. And this needs that the venture capital investment must be promoted too,and set up a good Venture Capital System.In the first part, the paper discusses the theory of transaction costs ,the theory of principal– agent,and the theory of adverse selection.Then it analyses six aspects of the Venture Capital System: finance mechanism;management mechanism;investment mechanism;risky control mechanism;profit mechanism;quit mechanism;then analyses and compares Venture Capital Systems in some foreign countries,concludes something that our country can learn and use;finally,this paper analyses the present conditions of Suzhou Venture Capital System,and emphatically introduces one Venture Capital Investment Company ,and gives some advices on how to promote the development and perfection of the Venture Capital System from law,policy,finance market ,etc.