Research On Risk Management Of Venture Capital Enterprise In The Transition Economic Environment

Proved at home and abroad, the venture capital industry has played a vital role in guiding industrial upgrading, promoting economic growth and improving employment, and etc. while it was in innovation and entrepreneurship development process. Shenzhen GEM helps a lot in solving the problem of financing SMEs, and in the meantime it opens up a wide range of effective exit channel for the venture capital. However, as the market's price-earnings ratio is generally high, it's very common that the start-up businesses have high expectation of the expected future value increase. This greatly reduces venture capital enterprise's profit. In addition, in China, the venture capital enterprises face a lot of special difficulties relating to economy restructuring and the localization. Therefore, studying risk management of venture capital enterprise will improve the success rate of investment and return on investment.This paper firstly introduces the background and purpose of the study on the risk of venture capital investment, and illustrates the main research contents, approaches and possible innovations. Secondly, researches characteristics of risk of the venture capital market and put forward the significance of venture capital investment under the current development of China's transition through introducing the concept, characteristics and process of venture capital investment. Considering the special risks that venture capital companies face under the transformation environment in China, come up with risk control strategy based on in-depth analysis and research in the external motivation, theoretical basis and practical operation. The risk factors on all venture capital investment stages have also been discussed, focusing on analyzing financing risks of venture capital enterprises. Put forward the risk avoiding approaches for each stage by taking China conditions into account. Specific case studies are used to confirm the conclusions after having a detailed analysis of risk factors and control method study. Finally, the paper summarizes the important control methods and the risks , and points out the inadequacies of this study.