| After World War II, the global politics was stable. It gave the rapid development of the world economy a fertile soil and a good environment.Then a group of SMEs was born at this time. But lacking for funds and talented managers led to the blocked development of SMEs. In this background, there was the first venture capital company established in 1946 in the United States. This venture capital company provide financial assistance to SMEs and helped them doing scientific management. Not only to promote the development of SMEs but also the venture capital company itself earned the first fortune during the investment process. After that, the United Kingdom, Germany also followed to established venture capital companies. And the venture capital industry is gaining popularity in the world.Development of China’s venture capital industry appeared relatively late to the developed countries. Until 1985, the first venture capital company- China Venturetech Investment Corp. was established. It means China’s venture capital industry just started. 15 years during 1985 to 2000, the China government promulgated the " Interim Provisions on the National Hi-Tech Industrial Development Zone, a number of policy " and " Decision on accelerating scientific and technological progress " a series of policies to support the development of venture capital, the country is also under the policy of vigorously encourage venture capital, Beijing, Shenzhen, Guangzhou, Shanghai and other cities had set up venture capital companies. But the government did not develop the venture capital industry specific legal rules and norms at that time. It was lacking of maneuverability of support and the GEM market was failed to establish. The lack of venture capital exiting mechanism made the vast majority of venture capital machinery’s funds that invested in equity investment enterprises stuck. They could not profit or exit. It greatly reduced the ability to reinvest.The number of.venture capital firm and venture capital investment reduced substantially.After 2005, China’s sustained economic was growing and the technology and capital were circulating worldwide and went deep into China. "Company Law", "Securities Law", "Partnership Enterprise Law" ─ a series of laws were made and constantly revised and improved. The reopening A-share market, the GEM, the New OTC Market, the equity trading center, etc...There was an establishment of a multi-level capital market system. It promoted the vigorous development of China’s emerging industries and also the venture capital industry ushered in a new opportunity ff the development. Only in 2013, there were 987 projects in China invested by domestic and foreign venture capital firms, and the investment amounted to 103.876 billion Yuan.While the crucial moments in building an innovative country and speeding up industrial restructuring and upgrading, China emerges a number of high-quality SMEs. They are entrepreneurial teams with core technology and extensive experience. But they are unable to research or make the product be industrialization because of financing difficulties and lack of funds. The venture capital firm has a lot of capital and advanced management experience. The venture capital firm looks for those potential SMEs and gains high returns through investment funds and guidance for those enterprises.How should a venture capital firm choose invested enterprises? Which part should be analyzed whether this enterprise is worth to invest? After the venture capital firm deciding the investment, which method should be taken to determine the valuation of the enterprise? ─ to determine the final price of the investment just like a bargaining game with the enterprise? And how to develop the bilateral investment agreement base on actual situation of enterprise and investment? These problems will be solved in this thesis. |
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