Venture Capital Theory: Research Evolution, Frontier Progress, and Development in the Chinese Context

Against the dual backdrop of global digital economic transformation and intensifying competition in technological innovation, venture capital has emerged as a critical nexus connecting capital, technology, and industry. Its theoretical paradigms and practical models are undergoing profound transformation. This paper systematically reviews the core literature in the venture capital field over the past five years (2020–2025), aiming to construct an integrated theoretical review framework. The findings reveal that venture capital theory continues to deepen across three core dimensions: in investment decision-making, it is evolving from qualitative judgment based on experience and networks toward quantitative and intelligent screening incorporating big data and artificial intelligence; in contractual governance, the focus has shifted from one-sided risk prevention and supervisory control toward value co-creation through empowerment, participation, and resource sharing; in exit mechanisms, the path has developed from an exclusive pursuit of IPOs to a diversified and strategic portfolio encompassing mergers and acquisitions, secondary sales, and SPACs. Within the unique Chinese context, venture capital practice exhibits a distinctive “dual-driven by government and market” characteristic. Institutional innovations such as government guidance funds and the STAR Market registration system have profoundly shaped the market ecology and driven a comprehensive shift in investment themes toward hard tech. This paper not only summarizes theoretical consensus and evolutionary trends but also identifies deficiencies in existing research regarding the management of macro-systemic risks, the quantification of empowerment mechanisms, and the assessment of broader socio-economic impacts. Future research should seek breakthroughs in ESG-integrated investment, cross-national ecosystem comparisons, and data-driven theoretical modeling, so as to provide more robust theoretical support for the allocation of innovation capital in an uncertain environment.

Keywords: Venture Capital, Intelligent Decision-Making, Contractual Governance, Exit Strategy, Localization Adaptation.