| Given the fact that the stage of venture capital investment isobservably moving backwards, it is of great significance to explore thefactors influencing the performance of early-stage venture capitalinvestment. Based on the review of Network Theory and other relatedresearches, this paper proposed the mechanism of how institutionalinvestor’s network characteristics would affect its performance inearly-stage venture capital investment. Hence, the hypotheses of thisresearch were raised that both the point centrality and structural holeswould place a positive impact on the investment result, exit efficiencyand exit return.Based on the data from2000to2013of all the early-stage venturecapital investments taken place in China, the empirical analysis wasconducted and the conclusions are as following:1. Institutional investor with higher centrality would get exposed tomore resources and more information, therefore institutional investor’s point centrality would have a positive effect on both the investment resultand exit return of early-stage venture capital investment;2. On the other hand, institutional investor with higher centrality isinclined to exit the deal through IPO, which costs much more time thanthe other ways, resulting in lower exit efficiency;3. When trust between the members in an open network is not yetenough, it is disadvantageous to their investees and thereby theirinvestment results;4. However, once the members in an open network develop a highdegree of trust, the innovative resources and knowledge conveyed by thenetwork would shorten the exit cycle and improve the exit return.On the ground of these conclusions, the implications for theinstitutional investors and government agencies are summarized at theend of this paper. |
