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| Analysis on Opportunity and Mode of Venture Capital Entering Innovative Enterprises Based on Threshold Model |
| FAN Mingxue，XIE Chi，HUANG Weiliang |
| Hunan University, Changsha, China |
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Abstract Through the improved catastrophe progression method, this study establishes the enterprise growth comprehensive evaluation index system, and combines this system with the threshold model to construct the enterprise growth threshold model, and then discusses the opportunity and mode of venture capital entering the innovative enterprise. Research shows that there is a clear double threshold effect when venture capital enters an innovative enterprise: When the growth is greater than the high threshold, the venture capital will bear too much risk, and the growth value of the enterprise is too small when the value is lower than the low threshold. Only when the growth of the enterprise is between the two thresholds, the venture investment is suitable for innovation. Similarly, there is also a double threshold effect on the way venture capital is entered: Venture capital will not choose any kind of investment when the growth of the enterprise is less than the low threshold. When the growth is between the high and low thresholds, choose to invest separately. If the growth exceeds the high threshold, choose joint investment. Based on the two double threshold effects, when the growth of innovative enterprises is between 0.580 and 0.708, venture capitalists should adopt separate investments. When their growth is higher than 0.708 and lower than 0.732, venture capital should be choose joint investment. If the growth is other values, the venture capital should not enter.
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Received: 19 September 2018
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