Research On Risk Management Of SZRL Investment Company

The venture capital industry is the sub-sectors in the financial services industry. It’s mode of operation is that the professional investors make equity investment to the target company, and moderately involved in management of corporation and providing value-added services for the target company, sharing the risk with target company, and eventually receiving the capital appreciation through the sale of equity. Venture capital originated in the United States and was introduced to China in 1980s. Driven by the Internet economy in the late 1990s and the establishment of GEM in 2009, venture investment got rapid development in China. Different from the way that the banks and other financial institutions use mortgaging assets to against the risk, venture capital companies engage equity investment and share risk with the invested companies. So risk management plays important role in investment institutions for it will directly affect the future earnings of investment institutions.In this paper, the whole investment process is divided into the four stages, pre-investment stage, investment stage, post-investment management stage and investment exit stage. In this paper, we select SZRL company as the research subject to analyze and sort out its experience and methods of risk management during the projects selecting process and the project investment process. Also, we do the complementary research about the risk management during the process of post investment and the process of investment exit for SZRL. We aim to establish the whole process of risk management for SZRL.The paper aim to analyze the characteristics of the process for each risk, risk identification, risk assessment and risk control. And finally select a typical company that SZRL has invested to do case studies, using the whole process of risk management method to analyze the case, exploring the further risk management for SZRL, and also be useful for other investment company with the same problem.