Service-oriented or control-oriented management in venture capital: Multi-agent and multi-stage game analysis approach — Empirical evidence from China

Based on the latest research of neo-institutional economics, the frontier of corporate governance is extended, and the concept of service-oriented and control-oriented management in venture capital governance is brought forward. Game theory is applied systemically in this paper to discuss all stages of venture capital governance. Especially, we analyze the aspect of participation in the management of venture business by means of game theory. It is necessary and possible for the venture capitalist to participate in the management of the venture-backed firm, which contains the strategic, financing, and operation management, etc. On the basis of the literature review, we analyze the mechanisms and the patterns of the venture capitalist´s post-investment activities. A longer venture capitalist´s participation in a firm may increase its value while also increasing costs for the venture capitalist. After deeply investigating the venture capitalist´s active and the enterpriser´s choices involved, we set up the multi-agent and multi-stage dynamic models to analyze how their activities impact on each other and what the equilibrium result is. In conclusion, we study the real situation in China and the factors that impact the equilibrium result and put forward some proposals.