Venture Capital Syndication under Social Network Theory:Literature Review and Prospect

As an important channel for start-ups to obtain R&D funds and external knowledge and information resources,and as one of the key methods for investment institutions to leverage scale and synergy effects to enhance investment returns,venture capital syndication holds significant research value in the field of venture capital.This paper reviews the literature,summarizing the motivations behind the formation of joint investment networks,the conceptual characteristics of the three core theories of social network theory,and the empirical research on venture capital syndication within the framework of social network theory.It also highlights the existing research results,identifies gaps,and anticipates future research directions.

How time-inconsistent preferences influence venture capital exit decisions?A new perspective for grandstanding

Considering that the assumption of time consistency does not adequately reveal the mechanisms of exit decisions of venture capital(VC),this study proposes two kinds of time-inconsistent preferences(i.e.,time-flow inconsistency and time-point incon-sistency)to advance research in this field.Time-flow inconsistency is in line with the previous time inconsistency literature,while time-point inconsistency is rooted in the VC fund’s finite lifespan.Based on the assumption about the strategies guiding future behaviors,we consider four types of venture capitalists:time-consistent,time-point-inconsistent,naïve,and sophisticated venture capitalists,of which the latter three are time-inconsistent.We derive and compare the exit thresholds of these four types of venture capitalists.The main results include:(1)time-inconsistent preferences acceler-ate the exits of venture capitalists;(2)the closer the VC funds expiry dates are,t`he more likely time-inconsistent venture capitalists are to accelerate their exits;and(3)future selves caused by time-flow inconsistency weaken the effect of time-point inconsist-ency.Our study provides a behavioral explanation for the empirical fact of young VCs’grandstanding.

The Dynamic Model of Allocation Control in Venture Capital

The allocation of control and stock in venture capital is the key point of the venture capital project.This paper develops a dynamic model of control and stock and profoundly analyses how to allocate the control between the entrepreneur and the venture capitalist.The model reveals the relationship of control and stock's structure,the time and the degree of imparting the control to the entrepreneur or the venture capitalist,the condition of retracting the control and compensation accordingly.

Venture capital in Japan and enlightenment to China

In the business world, there have always been people are willing to start business, and other people are willing to back them and share the risks and rewards of enterprises, so in a sense, there has always been entrepreneurship and venture capital （VC）. Despite of Japanese VC has gone through ups and downs, Japanese VC continues to lead Asia and is second only to U.S. Japanese government has recognized the economic benefits of fostering the creation and development of venture finns, and has applied themselves assiduously to the task of creating a supportive environment. This paper provides some context for understanding the Japanese venture capital industry. Then it set forth an evolution of Japanese venture capital. The heart of the paper is devoted to discussion of the key features of Japanese venture capital. This includes information concerning the size of the industry, the players, and the nature of the Japanese venture capital investment. This is followed by an analysis of some of the obstacles to a more vibrant Japanese venture capital industry which gives us some enlightenment to Chinese venture capital development now. This paper also shows that the relative of the US, the Japanese venture capital industry is a young, small industry. In a word, it shows that there is still a substantial space for further development, which makes VC is still a promising industry in Japan.

Incentive Contracts for Venture Capital Syndication

Aiming at the incentive problems of venture capital syndication at the second and later stages, an game model is set up by principal agent and incentive theory, given that the lead venture capitalist has already some knowledge of the project quality from his initial funding of the project. Under symmetric and asymmetric information, the model analyzes how the optimal syndication contracts induce venture capitalists to truthfully reveal their information to each other, and vary with the level of venture capitalists＇ expertise and information in evaluating projects.

China Venture Capital Review

Based on our joint survey with Zero2ipo.com, Ltd, we have gathered data from 175 domestic and foreign venture capital companies, and mainly focused on 125 companies (92 domestic and 33 foreign) in large scale. According to our research,

China Moves to Boost Venture Capital

The Chinese government recently announced measures to stimulate venture capital(VC)in an effort to sustain the ongoing entrepreneurial wave,To increase investment in cash-starved startups,China will nurture more VC investors,strengthen policy support,

A Prey- Predator Model for Venture Capital Investment

The Rosenzweig-Macarthur Model is used to partially explain Venture Capital investment cycles. Investment opportunities and the experience of the investors, represent the prey and predator respectively. Stability analysis with respect to the interior equilibrium point is performed and dynamics of the system are investigated using numerical simulations and results are presented. The model shows that parameter variation affects the stability of the system and it experiences bifurcations. The results show that stability analysis is useful to provide a Venture Capitalist with the stability ranges of parameters in the system, to improve the quality of the investment process.

Research on Tax Preference Policy of Venture Capital

In the last few decades, the economy increased rapidly, but the rapid growth is at the cost of high consumption of resources and high pollution of environment. It is imperative to transform the economic growth pattern. Tax policy relating to venture capital is very important to build innovative country and encourage the development of venture capital. Based on the background, the paper researches the tax preference policy of venture capital in developed countries and in our country, and draws relevant conclusions.

Comparative Study on Venture Capital among U.S.A., Japan and China

This essay, through comparing venture capital in China＇s modernization with U.S.A., Japan, summarizes the different characteristics of venture capital of the United States and Japan, and thinks that China＇s present modernization, as a flag of developing countries, has already entered middle period of industrialization, according to the experience of U.S.A., Japan and reality of China. The technological progress mode has already been changed from technology import to technological innovation stage at this time. In order to encourage innovations, we must develop venture capital in a more effective manner. The national conditions have determined the technology import of China, which must start with a high points, this is the most important condition of target to choose. The venture capital of China in system transitional period should use U.S.A.＇s experience for reference even more on the capital source to pay close attention to the capital sources of the government and bank. Once the government guides and starts the market, the folk capital will show the natural instinct of the capital automatically Risk investment is the embodiment capitalized personality spirit, in order to dispose such ambitious culture. We need the reform of the system as well as dispose risk investor＇s stratum at present.

Stimulating Start-up Investment Through Government-Sponsored Venture Capital:Theory and Chinese Evidence

Government-sponsored venture capital(GVC)has been used to support financially constrained start-ups as an important policy tool in China.Typically,to motivate the social capital to invest in start-ups,GVC provides subsidies for them to bridge the funding gap in the early-stage venture capital market.However,the effect and mechanism of GVC affecting social capital investment have not been clearly studied.In this paper,the authors not only develop a game model to analyze this issue in theory,but conduct an empirical study by analyzing the 14741 records matched by propensity score matching(PSM)of Chinese venture capital market data from 2011 to 2021.The proposed findings are as the follows.Firstly,the subsidies offered by GVC will simultaneously increase the returns and risks of investments in start-ups of social capital with more volatile incentive effect of GVC.The incentive effect of GVC is only effective when the returns resulting from the subsidies outweigh the risks they introduce.In the context of the Chinese venture capital market,the incentive effect of GVC is effective.Secondly,the incentive effect of GVC is more pronounced in high-tech industries,which can be attributed to the signaling effect facilitated by GVC.In this context,the subsidy mainly helps social capital to bear the costs associated with screening potential investments.Thirdly,the incentive effect of GVC is more significant in underdeveloped venture capital markets,which can be explained by the“virtuous cycle”effect,in which GVC plays a pioneering role in establishing a more robust early-stage market trading system.By examining these three points,this study contributes to a better understanding of how GVC can effectively guide social capital investment,especially in the Chinese landscape.

Economic policy uncertainty and firms’investments in venture capital funds:Evidence from China

The latest business practice in the Chinese venture capital(VC)market involves the active participation of non-financial firms,as limited partners,in VC funds.Exploiting a unique hand-collected dataset from China,we find that economic policy uncertainty is positively related to the propensity of firms to participate in VC funds.Cross-sectional tests show that the positive effect of policy uncertainty on the likelihood of participating in VC funds is enhanced by industrial growth opportunities.Furthermore,economic consequence tests show that participating in VC funds is conducive to improving investment efficiency,increasing innovation performance and promoting product diversification.This study advances our understanding of firms’investment decisions and the VC industry development amid economic policy uncertainty.

Who Are the Elites in the Venture Capital Industry?-Investigation of Elite-Club Boundary in a Co-Investment Network

Existing research suggests that elite clubs exist in venture capital markets,but a standard for determining their size and composition is lacking.This paper addresses this challenge by using the weighted k-means sorting algorithm to construct a research framework for elite clubs.Validating the framework with investment events data from China’s venture capital market(2001-2018),intriguing findings emerge.The ranking of Venture Capitalists(VCs)follows a power-law distribution,providing evidence for elite clubs’existence.The analysis identifies a turning point in the score curve,serving as a valuable indicator for club boundaries.Elite clubs demonstrate relatively high stability,maintaining advantages and elite status in future competitions.Empirical validation confirms the proposed framework’s superior stability compared to existing methods.Importantly,elite club members outperform non-elites significantly.This paper effectively identifies elite clubs in the Chinese venture capital market,helping other VCs recognize potential partners,access high-quality information,and enhance investment performance.

Factors influencing venture capital perforsmance in emerging technology:The case of China

This study aims to identify the systematic factors influencing venture capital performance in emerging technology.Emerging technologies are the driving force of contemporary economic and social development,but their technologies and markets are subject to great uncertainty.As a high-risk,high-yield investment method,venture capital plays an extremely important role in supporting technological innovation and promoting the upgrading of industrial structures.Following information processing theory,this study applies a quantitative analysis to data from 61 venture capitalists in Beijing,China using structural equation modeling(SEM).The sample firms were established since 2015 and invested mainly in emerging technology startups.The model passed the goodness-of-fit indices test and reveals that information acquisition,venture capital executives,and venture capital strategies have a positive impact on venture capital performance,and venture capital strategies played a partial mediating role.

国家竞争力、高技术产业化与金融创新

Under the background of economic globalization, the competitiveness of a country or a region depend no more on traditional basic elements,but on senior ones whose characteristic is high technology, especially on the capability of technique innovation and hi - tech industrialization. Venture capital is the seedbed for hi - tech industry and is most suitable for the growth of hi - tech industry. Second - board market and investment banks are also vital factors for the commercial running of high - tech industry. Thus develop high technology and quicken its industrialization is an imprortant way to raise competitiveness of China. To obtain that goal, we must establish such a mechanism that integrated venture capital,second - board market and investment bank as one to form the institutional foundation for hi - tech industrialization.

The impact of FinTech start-ups on incumbent retail banks’share prices

Background:This study aims to clarify the role of FinTech digital banking start-ups in the financial industry.We examine the impact of the funding of such start-ups on the stock returns of 47 incumbent US retail banks for 2010 to 2016.Methods:To capture the importance of FinTech start-ups,we use data on both the dollar-volume of funding and number of deals.We relate these to the stock returns with panel data regression methods.Results:Our results indicate a positive relationship exists between the growth in FinTech funding or deals and the contemporaneous stock returns of incumbent retail banks.Conclusions:Although these results suggest complementarity between FinTech and traditional banking,we note that our results at the banking industry level are not statistically significant,and that the coefficient signs for about one-third of the banks are negative,but not statistically significant.Since the FinTech industry is young and our sample period short,we cannot rule out that our findings are spurious.

An empirical study of the effect of venture capital participation on the accounting information quality of IPO firms

Using a sample of IPO companies on the Shenzhen Small and Median Enterprise Board and the ChiNext Stock Market between 2005 and 2009, this paper analyzes the effect of venture capital participation on accounting information quality. We find that venture capitalists have a significant effect on earnings management, with reduced discretionary accruals before the expiration of the equity lock-up period and enhanced discretionary accruals after the expiration of the equity lock-up period. Our findings support the moral hazard hypothesis of venture capital, but not the certification/monitoring role of venture capital in IPOs. In addition, we find that venture capital plays a more important role in the earnings management of non-state-owned IPO companies than of state-owned companies.

The pattern,evolution,and mechanism of venture capital flows in the Guangdong-Hong Kong-Macao Greater Bay Area,China

As an important innovation flow,venture capital has been examined in urban network research.However,the segmentation of capital categories and the cross-scale connection of capital remain scarcely analyzed.This study focuses on the structure and industry differentiation of venture capital flows in the Guangdong-Hong Kong-Macao Greater Bay Area(GBA)and its cross-scale network characteristics.Based on a venture capital database covering capital amount,investment subject address information,and industry information(2000-2018),this article examines the spatial distribution and network structure of venture capital in the GBA by means of a distance-based test of spatial concentration approach and social network analysis.Key findings show that:(1)Venture capital institutions and startups in the GBA present a high-concentration distribution pattern.In the past 20 years,venture capital activities in the GBA have substantially increased,forming a complex urban network structure with Guangzhou,Shenzhen,and Hong Kong as the core of this network.(2)Different types of venture capital show significantly different urban network structures,with manufacturing,the Internet industry,the financial sector,the cultural media industry,and the medical and health industry as the five industry types with the largest capital flow in the GBA.(3)Cross-scale research on the venture capital network reveals the position of the GBA as a capital hub in China,which forms a dense venture capital connection network with major cities on a national scale.(4)The network structure of venture capital in the GBA is influenced by multi-dimensional proximity,institutional factors,urban economy,and path dependence.Along with these three key mechanisms,the GBA has grown into a national-scale and even global-scale venture capital center.