Impact of Venture Capital on Performance of NEEQ Listed Firms

Venture capital is a new financial instrument that promotes "mass entrepreneurship and innovation", and plays an important role in promoting industrial restructuring and economic transformation. Venture capital firms affect the performance of portfolio firms by providing business strategy, key business network resources, human resource management, monitoring activities, etc. 844 VC-backed and 9 415 non VC-backed firms listed on the NEEQ from 2010 to 2018 were select as our sample, and the impact of venture capital on the performance of the portfolio firms were studied from the perspective of investment experience. Moreover, the instrumental variable was used to solve the endogeneity problem of the model through 2SLS. The empirical results show that venture capital has a significant positive impact on portfolio firms' financial performance as well as their growth. Furthermore, older venture capital firms are richer in investment experience, and significantly promote portfolio firm performance. At the same time, venture capital firms with better exit performance make higher evaluation of its capabilities within the industry, and further provide additional resources and subsequent financing for portfolio firms, thereby improving portfolio firms' performance.