Most startup companies don't have enough capital, to begin with, and struggle to remain open. They search for outside investor support until they can achieve profitability. If you are the owner of a small business, then you should know that getting your company funding is one of the most difficult phases a business can face.
Seeking this venture capital is an increasingly growing trend fueled by a combination of various factors, such as improvement in the IPO market, abundant entrepreneurial talent, promising new technologies, and government policies favoring venture capital formation.
Venture capital investments give you and your company the resources it needs to grow to its full potential since it is used for a variety of things. For example, you can invest in top-notch talent, new machinery; manual laborers or you may need to invest in research or new technology.
China is a developing and transitioning country, its venture capital market consists of some special characteristics.
China's venture capital practices, relying on various sources of capital, have undergone a difficult process of development.
a) Serious information asymmetry
b) Serious exclusionism
c) High cost of investment
In China company demand a majority holding in cooperation with venture capital firms on the belief that one will lose control over the company without majority holding or a leadership role in the company.
China lacks an infrastructure of service professionals that offer proper services to the venture capital community to support venture capital firms
The legal framework for venture capital investments is unequal
The Chinese capital markets provides poor exit channels for venture capital investments
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To know more, you can visit here: Corporate Governance In China