Venture Capital in China

Abstract

Venture capital has been widely studied in the U.S. and Europe, but only recently it has received greater attention in China. This, despite the fact that China has one of the world's fastest growing economies and is home to approximately one-quarter of the world's population. As China's private sector continues to grow, venture capital funds have directed increasing attention to small- and medium-sized technology-based firms. The challenges encounters by venture capitalist in China differ strikingly from these in more mature markets. This article details some of the issues to be dealt with in financing technology ventures in China and offers recommendations for how venture capitalists can address those challenges.