The Venture Capital Supporting Environments in China

Abstract: The development of venture capital industry is not only about the effective operation of venture capital firm, but also its supporting environments. The venture capital firms in different countries have different operation modes, for instance, the organizational structure, the source of finance and the investment behavior. The reason of the differences is that the venture capital supporting environments such as economy, culture, laws and regulations are different in various countries.   The objective of this research is to study the venture capital supporting environments in China and analyze the role of government on how to improve these supporting environments. After research questions are decided, the author analyzes and combines the selected previous researches in different countries in order to build a more systematic, scientific and complete theoretical framework to conduct the case study in China.   In the case study, all seven venture capital supporting environments in China are studied. By analyzing the facts, the author finds out that some environments such as laws and policies and financial environment have developed rapidly in past years and become more and more adapt to the development of venture capital. However, some other environments, especially the culture environment have negative effects on venture capital and can not be easily changed within a short period of time. Based on these findings, the author tries to find out some possible actions that the government can do to reduce these limitations and improve the venture capital supporting environments.     Key words: venture capital; supporting environment; venture business; venture capitalist