Study On Venture Investment Risk Management Of Biomedical Innovation Companies

With the development of China's economy,capital demands of companies are enlarged especially high-tech innovation enterprises.Venture capital investment has become the main financing channel to high-tech companies which development is promoted by venture capital.The commercialization of research findings depends on the supporting of venture capital.The transformation of scientific and technological achievements is full of uncertain.How to guarantee the fund security and lower the risk is a difficult problem to venture capital enterprises.Establishing risk management mechanism is an effective means to venture capital firms.Along with China industrial strategy adjustment,the bioengineering and pharmaceutical industry has become one of the most important industries which attraction to capital is growing.Biomedical industry is a sunrise industry that has characteristics of high technology,high risk,high input and earnings.Length of time is big from product and technology research and development to enter the market successfully.In the process of venture capital investment to bio-pharmaceutical innovation enterprises,venture capital firm need to face a series of risks,such as system policy,technological innovation,market,management etc.There are different kinds of risks in each stage of company development cycle.When venture capitalist invested in venture firms,different kinds of risks should be on guard.According to domestic and overseas relating articles,correlation theory about venture capital investment and risk management was summarized.The industrial characteristics of biomedical industry and investment risk were analyzed.A bio-pharmaceutical innovation enterprise is an investee of L venture capital company.Risk management mechanism of investment to A firm was analyzed.At the same time,we introduced the real option theory to manage the risks in the process of A enterprises stage investment.At last,L venture capital company risk management system were summarized and improved.Venture capital investment originated from overseas.Most of the domestic theories about venture capital investment and risk management were referred to foreign experiences.We analyzed the investment risks of bioengineering and pharmaceutical industry which investment risks was high and gave an advice to investment risk management to bio-pharmaceutical innovation enterprises.Real option theory was adopted to manage the stage investment behavior in order to reduce investment risk of venture capital enterprises in investing in biomedical innovation companies.