A Research for Governance Mechanism of Social Networks on the Venture Financing

Information asymmetry and future high uncertainty of venture business plan lead to the difficulty that entrepreneurs and investors make a deal.Economic theory based on contract design can't explain the venture financing phenomenon completely,and the social network theory provides a new theory method.This research starts from previous studies and proposes three theoretical hypotheses.And the statistical analysis results of 81 cases from 24 Shanghai ventures suggest that the function mechanism of social networks on the venture financing is comprehensive,taking private information as the base,personal trust as the core,and coexistence of selfishness and altruism as the characterization.