Analysis of the factors that influence venture capital fundraising: An empirical study in China

China is now in a period of economic transition and the promotion of the venture capital (VC) industry embodies the national strategy of building an innovation-oriented country. A sufficient supply of fund capital is a prerequisite to the development of the VC industry, as it is essentially engaged in fundraising activities. It is thus of considerable significance to investigate the supply of the funds for VC, or in other words, to examine the various factors that have an impact on VC fundraising. Although, some scholars have undertaken empirical analyses of these factors, there are no studies that have examined the VC fundraising factors in China based on domestic data. However, those factors that have already been studied are likely to have, significantly, different influences in different countries. Consequently, this paper defines seven factors that may impact VC fundraising based on interviews with Chinese VC entrepreneurs and limited partners in China. The seven factors are tested through regression analysis based on Chinese data and the results show considerable differences when compared with other countries. This paper undertakes a detailed analysis of the Chinese VC fundraising factors based on the existing academic framework and the unique Chinese data. Based on this, the study will present some recommendations for the development of the Chinese VC industry.