The effect of policy support on the decision of micro subjects in venture capital

Decision model for venture capital provider and venture capitalist is established, and the effect of policy support on asset allocation and effort level of venture capitalist and the effect on asset allocation of venture capital provider is studied. The study shows that venture capitalist would enhance his effort level and venture capital company would increase the weight of investment to venture capital project because of policy support. The effect on allocation decision of venture capital provider depend on the correlation between venture capital projects and general private equity investments projects. The positive correlation will result in reducing the allocation of venture capital and negative correlation will increase the allocation of venture capital, but the amount of investment to venture capital project will increase in any case.