The Research Of The Venture Capital And GEM Corporate Governance

In China, venture capital industry has made great progress in the support of policy and economic since 1980 s, especially after the launch of the gem in 2009, the development of the venture capital industry has entered a new climax. The characteristics of high growth and high risk of the GEM Listing Corporation are favored by venture capital, and it provides the convenience for the intervention of venture capital. Venture capital in order to obtain high returns, they tend to be involved in its corporate governance through the form of controlling it’s stock rights. Therefore, they can not only solve the problem of financing for SMEs, but can also take advantage of their professional skills and social resources to provide more value-added services. In this paper, study on the relationship between venture capital and corporate governance of GEM can help companies optimize the corporate governance structure and enhance the level of corporate governance, promote the healthy and steady development of venture enterprises. Venture capital is also very important for the growth and transformation of high-tech enterprises, so the research of this paper has a certain significance to promote the development of the national high-tech industry.Based on the evidence from High-tech companies in the GEM Listing, this paper reviews the relationship between venture capital and corporate governance, which focus on two aspects of corporate governance that include board characteristics and the ownership structure, and the top ten shareholders of whether there is a venture capital investment as a measure of VC support. We try to find out whether venture capital plays an active role in improving the management of SME corporate governance. thus propose some reasonably and practicable recommendations which could be beneficial to promote the development of the GEM and Venture Capital Industry.In the process of mechanism analysis, This paper first analyses the principal-agent relationship between venture capitalists and innovation enterprise, we find that venture capitalists would be participate in corporate governance activities in order to solve the problem of asymmetric information and to obtain high return on investment. Then, we systematically discusses the reasons and ways of venture capital participation in the governance of SME, and analyzes the factors that affect the effective participation of venture capital in China from three aspects: capital market environment, policy environment and corporate culture.On the basis of theoretical analysis, the study analysis the governance of listed companies in both directions on the board characteristics and ownership structure. The independent variables of the board characteristics include board size, the proportion of outside directors and the board director holding a CEO concurrently. The independent variables of the shareholding structure include ownership concentration, stock checks and balances, the degree of the controlling shareholder. In this paper, we study the 406 small and medium enterprises listed on the gem by the end of 2014, then classified according to whether there is VC support, and the hypothesis is verified by the combination of comparative analysis and regression analysis. There are four assumptions have been verified and the result is remarkable: the board size, the proportion of outside directors positive correlation with venture capital ownership, ownership concentration and the degree of the controlling shareholder is negatively related to the venture capital shareholding. The results of the other two assumptions are not obvious.According to the results of empirical analysis, the article draws three major conclusions and we attempt to put forward some rationalization and the feasibility of proposals. This paper argues that venture capital is closely related to some aspects of the characteristics of board and equity structure, which shows that the risk investment has the power and ability to improve the management structure of the GEM Listing Corporation. However, this positive effect is not fully played under the institutional environment and cultural environment. Therefore, how to better play the role of venture capital management remains to be in-depth study.