A research on exit strategy of foreign venture capital investment in Chinese private business sector

Jin, Xin (2007) A research on exit strategy of foreign venture capital investment in Chinese private business sector. [Dissertation (University of Nottingham only)] (Unpublished)

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With the emergence of knowledge economy and the development of science and technology, more and more entrepreneurs who seeking venture capital funds to finance their great inventions become much more appreciated. As a result, the essential of venture capital investment has encouraged more people to fulfill their entrepreneurial ambition. As the major scientific and technological development driving force, the entrepreneurial ventures derived from latest innovations attempt to take part in reinforcing the social and economic developments are recognized.

Moreover, venture capital (VC) is a rather young industry in China compare to the US and UK's long outstanding history and contribution. Hence, there are a number of issues and challenges faced both for VC investors and Chinese private enterprises. Especially, the exit strategy as prominent stage for investors and entrepreneurs to realise potential profits and enhance future grow. As a result, choosing right exit strategy for foreign VC investments in Chinese private business sector is crucial at the threshold of the VC development in China. Thus, the issue of VC exit strategy has come under the spotlight and deserve much more research attention.

This paper analyze the issue of exit strategy adopted foreign venture capital (VC) firms while invest Chinese private enterprises. In particular, the importance of initial public offerings (IPOs) is considered. Through two specific company case studies, I find that IPOs are their prioritized exit strategy, as well as their VC investors' promise of high return. Despite, due to Chinese distinctive political and legal systems, there are different governmental policies and legal frameworks that may impede foreign VC's strategic choices in realizing their investments. This research also finds that other exit strategies are approachable but IPOs is crucial driver and determinants of foreign VC investment funding in potential Chinese private businesses. Moreover, I also find that there is a need to improve and build exit mechanism to facilitate the development of VC industry in China, so some recommendations have been suggested. Moreover, the analysis may have some limitations and lack of sophistications in nature, the issue of VC exit strategy still require more extensive research particular in Chinese context.

Item Type: Dissertation (University of Nottingham only)
Keywords: Venture capital exit strategy
Depositing User: EP, Services
Date Deposited: 05 Mar 2008
Last Modified: 08 Feb 2018 20:36
URI: https://eprints.nottingham.ac.uk/id/eprint/21042

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