Is Venture Capital a Positive Investor in NEEQ？
- CHEN Hongtian, SHEN Weitao
- Xiamen University, 361005
SEOs play a fundamental role in the equity financing of NEEQ enterprises, in which venture capital is one of the most important participants. This paper selects the 2013—2016 SEOs of NEEQ as the research sample, and examines the motivations and economic consequences of venture capital's intervention. In general, this study finds that venture capital will prefer enterprises with better financial performance and innovation ability to participate in NEEQ private placement, which can support the conclusion of the pre-screening function of venture capital. However, when the ownership concentration is too high, the possibility of venture capital's intervention will be weakened, especially when the major shareholders also participate in the subscription. In addition, venture capital favors adopting joint investment approach when confronting projects with high financial performance and innovation ability uncertainty, which reflects a more cautious style of investment in NEEQ. However, venture capital is restricted by its capability and willingness to invest after it entered the enterprise. It does not significantly enhance financial performance and innovation ability. Considering the unique market making and stratified system of NEEQ, this paper verifies the performance of the pre-screening function and the absence of the post-supervision function of venture capital. This paper not only reveals the motivation and economic consequences of venture capital's participation in the SEOs of NEEQ, but also provides empirical evidence for the country to promote innovation strategy with NEEQ, build and improve a multi-level capital market.
- NEEQ, Venture Capital, SEO, Ex Ante Screening, Ex Post Supervision