Research on the Proportion of Venture Capital Holdings and Its Changes on the Short-Term Performance of Enterprises

University of Chinese Academy of Social Sciences, Gongchen Sub-district, Fangshan District, Beijing, China

^* Corresponding author: 20231031113@ucass.edu.cn

Abstract

With the state’s emphasis on guiding private equity, venture capital (VC) investment has gradually gained momentum in China. The proportion of VC investment and its changes at the time of IPO may influence short-term corporate development. This study employs correlation analysis, descriptive statistics, and regression analysis to examine the impact of VC shareholding ratios and their changes on short-term corporate performance, while validating the applicability and time validity of general patterns explored by foreign scholars in the Chinese market. The findings reveal that a higher pre-IPO VC shareholding ratio exerts a significant negative linear effect on administrative expenses in the second-year post-listing, and moderate changes in VC holdings similarly drive a significant negative linear change in administrative expenses for the second year. Furthermore, changes in VC shareholding ratios significantly affect R&D and sales expenses, indicating that VCs enhance operational efficiency by optimizing corporate resource allocation and governance structures. This research not only confirms the applicability of principal-agent theory in China’s market but also offers strategic insights for corporate IPO planning and policymaking. The results demonstrate that both VC shareholding ratios and their fluctuations substantially impact short-term corporate performance, though the underlying mechanisms vary by firm type and industry characteristics.