Influence Of Venture Capital Background On Firms’ Technological Innovation And Performance

Venture Capital with its unique "filter", "supervision" and provide "value-added services" function to ease the financing needs of high-tech enterprises which have high operating risks, through a unique mechanism of Contracts identified capital property, reflect the present value of uncertainty of the future value of technological innovation. Venture capital alleviate the information asymmetry, play a very im-portant role in solving the fund shortage of technological innovation and develop-ment faced by start-ups, promoting the business performance and technological in-novation.China’s venture capital industry originated in the late 80s of the last century, The initial supply is mainly state-owned institutions, foreign venture capital institu-tions arising with the huge potential growth of the economy, with the rapid econom-ic development and gathered a lot of private capital, emerged a large number of pri-vate independent capital agency, In order to spread risks as well as obtaining more money, resulting in many mixed investment cases, we defined this company as hav-ing a mixed syndicates background investment. Based on above we propose two research questions, The first question is whether it is venture capital in China has a positive impact on firms’technological innovation and performance? The second question is whether the existing four types of venture-backed enterprise having a significant difference in technological innovation and performance?These two questions were answered through six parts,Firstly we describes the background by introduced the venture capital industry for nearly 20 years in the de-velopment of our country briefly; Secondly followed by domestic and foreign rele-vant research literature review we propose six hypothesis in this paper by theoretical analysis; Finally we use the Shenzhen small plates and GEM listed companies from 2009-2014 as a sample to examine the six major assumptions.Innovation of this paper lies in the following two aspects:One is previous liter-ature study the impact of venture capital on firm’s performance mainly in terms of operating results, the choice of indicators generally tend to measure profitability, with little to distinguish the difference between the growth and profitability. General conclusions are that the venture capital on enterprise performance has a positive ef-fect before the IPO, after the IPO has a negative effect, but few further investigate the positive and negative effects embodied in what aspects, From two aspects of the growth and profitability, we draw the conclusions which has a positive effect before the IPO because venture capital have a significant positive impact on the growth ca-pacity, and which has the negative effects after IPO mainly because the sharp decline in profitability. Two is measure the impact of venture capital on technological inno-vation through two angles which are number of patents as technological Innovation results and the percentage of R&D expenses in revenue share as technological inno-vation resources, the number of patents is to manually collect from SIPO website.Through in-depth research, we draw the following three conclusions:1、Before the IPO, the impact of venture capital on firms’performance mainly reflected in Growth capacity, the impact on profitability was not significant, the venture capital has more positive impact on business performance before the IPO, but the post-IPO’ impact is not positive, the reason is profitability after the IPO have significant negative effects.2、Compared with the state-owned background, Private independent back-ground and mixed syndicates background have a significant positive impact on growths profitability and comprehensive performance, foreign background also has a positive impact but not significantly.3、Compared-with-non-venture-backed companies,Venture-backed-companies are more abundant in technology innovation resources, but no significant differences on technological innovations. In the four backgrounds of venture-backed, only for-eign background have a significant positive impact on technology innovation re-source, but unfortunately its impact on technological innovations is not significantly. Compared with state-owned background, other backgrounds do not have a signifi-cant impact on two aspects of Technology Innovation.Based on the above findings, we propose corresponding suggestions:Firstly, the government should clarify their position, separated the invest capital and man-agement, he can provide the finance and entrusted to managers with high screening capacity to manage; Secondly, improve the policy environment for the venture capi-tal industry, the government should establish a sound tax policy, legal environment, human environment, promote the development of the venture capital industry, the most important is to improve the legal environment; Thirdly, improve the small plates, GEM, three new board business rules to establish a good "Transfer" mecha-nism Promoting OTC market converted to exchange market, building a sound finan-cial services platform to guide the healthy development of SMEs which can achieve a perfect butt with capital market.However, there are some limitations of this paper, there are other ways to exit for venture capital such as mergers and acquisitions、equity transfer、management buyouts which have a very impressive scale, but because of comparability and data availability so the contents of empirical research is limited to the sample through an IPO exit. Firms’technological innovation and performance are both complex varia-ble, so there may be other negligence although this paper has been to measure these two variables from multiple perspectives.