Transformation In China Venture Capital Enterprises In The Economic Environment, The Investment Management Process And Risk Control Methods

From the developed countries' industrial history, we can discover that the venture capital has played a vital role in the scientific innovation and the industrial development. Since 2000, there have been many local venture capitals in China and the market reached an extreme top in 2007. But in 2008, the economic crisis let Chinese VC and PE calm down and push them to reconsider risks in the whole investment process and to seek how to control the risk maturely.The whole VC industry usually has high investment return with over 30%. But it also faces high risks which come from the market, technology, management and other factors. VC industry faces some especial risks in China, because China just transfers its economy from planned system to free market system. As a result, it lacks of complete laws and policies to support VC development. In such background, it is very necessary and important to do some research about risk analysis and controls in the whole investment process.The author tries to apply the law, finance and management theories in the VC whole investment processes. What's more, the author will use some practice cases to illustrator how to identify the risks and control them. In the end, the author would analyze the finance storm influence on Chinese VC industry and give some suggestions about the industry development.