The Research On Risk Control Of Venture Capital

Venture capital has made an important contribution in transferring science and technology into productive forces in the era of the knowledge-based economy, creating a large number of riches.But there are not many successful cases in venture capital, because of the high risks in the process of venture capital. And even in the birthplace of venture capital, the United States, the success rate is only about 20%.As a result, risk control has become an important research more and more.This article makes a research on risk analysis and risk control, especially on risk control on the basis of the previous studies of others, keeping a perspective of venture capital companies, in the hope of assisting investment companies to work well in the field of venture capital practice.The paper mainly involves the following,1.The foundation of venture capital, including definition, elements, etc, and taking the life cycle of venture capital as the main analytical clue of this paper.2.Risk analysis, including risks in the process of financing, investment, and quit, which are static and dynamic, and in this article focusing on the dynamic nature of risks.3.Risk control, including the principles, feasibility analysis, the practice of control strategies, and the details of risk control towards the risks in the process of investment, through qualitative and quantitative methods of analysis.With regard to financing stages, the majority of previous studies concentrated on government supporting, guidance and other means of external control. But this article also analyses the internal means, including financial management and the establishment of third-party agencies to promote mutual understanding and regulating the management of venture capital.Risk control in investment stage require good options in choosing venture companies, especially to pay attention to core competence of venture companies, taking necessary management to help venture companies develop well.And in exit stage, it analyses the mainly four ways to exit, focusing on the IPO approach, and gets the view, IPO is not the best way to exit, and every way has its advantages and disadvantages. However, it needs to consider some factors, such as economic environment, the quality of venture companies. At last, this paper puts forward a linear programming model to point out the theoretical best time to withdraw from venture companies.The paper mainly puts forward some new ideas,1.Overall thinking on risk control. The existing articles mostly studied on one part or one single point of view of the main risks and risk control, but this paper not only studies on risks from venture capital companies but also from venture companies. And besides this, it studies on risks influenced by macro-environment and economical organizations in venture capital. What is more important is that the study begins with the venture capital life cycle.2.1n the general discussion of risk control, many articles just put forward the basic principles of risk control and overall strategies. But this paper discusses a risk control model based on the principles of risk control, which educes a risk control feasible region, pointing out that only if risk control is in the feasible domain, it makes sense. And according to the feasible region, it evaluates the practice of overall strategies.3.Taking the financial management thinking into risk control. As we know, good financial management can reduce risks in investment. As a result, it is necessary and valuable to put it into risk control. For example, our predecessors often focused on policy to reduce financing risk. But this paper considers financial management as a solution, good financial decision-making, to create an attractive rewards distribution system, to improve profitability etc. in order to reduce financing risk.4.Supporting and preparing for the original innovation and taking imitative innovation to reduce technical risk, combining with technological innovative ways.