Recycling-based Enterprise-based Venture Capital Research

Circular economy is the best model of sustainable development. As the core efficient and recycling use of resources, on the principle of reduce, reuse and recycle, and with the basic features of low consumption, low emission, and high efficiency, circular economy is the revolution of traditional economic development with the characteristics of mass production, mass consumption, and mass abandoned. In recent years, many countries have attached great importance to the development of circular economy; so does China. Circular Economy Promotion Law of People's Republic of China takes the development of circular economy as a major strategy of national economic and social development. Recycling enterprises are the main body of circular economy, and play crucial roles in the development of circular economy. However, due to their risk characteristics, recycling enterprises are faced with funding difficulties. As a result, the paper do some research on the problem of recycling enterprises funding, and focuses on the effect of venture capital on risk, value creation and other aspects of recycling enterprises.Due to the high-risk and high-yield characteristics of recycling enterprises, investors are prudent on their investment, resulting in funding difficulties of recycling enterprises. However, venture capital has natural advantage. Venture capital is a long-term equity investment with no purpose of short-term interest and dividends. on the contrary, it concerns high-yield return on equity, so it can accept high risk. Venture capitalists not only invest in the business, but also help manage the business, help companies add value. Therefore, venture capital is the best way of funding for recycling companies. Based on this, the paper propose some suggestions to accelerate the development of recycling enterprises:firstly, to establish government guided funding and expand financing channels; secondly, to build fast track, and promote more recycling companies listed; thirdly, build the property financing platform of recycling industry.This paper is divided into six parts. The first part is an introduction with description of research background, significance, an overview of relevant literature, the ideas and methods of this study. The second part analyzes the value of recycling enterprises, focusing on their characteristics and value. The third part is an analysis of recycling enterprises'risk characteristics. The fourth and fifth parts are both the body section of this paper. The forth part built a corporate financing model with the introduction of venture capital investment and describes its significance of promoting the development of recycling companies. The fifth part summarizes the experience of overseas circular economy development and elaborates the experience of our country, taking GEM an example. The sixth part is the conclusions and recommendations.