An International Comparative Study on Preference and Return Rate of Venture Capital in China and Canada

ABSTRACT: As a core capital force to promote scientific and technological innovation and industrial upgrading, venture capital has shown significant national differentiation characteristics under the background of deep adjustment of the global economic pattern. This paper selects two important global economies, China and Canada, as the research objects, and makes a systematic comparison from three dimensions of development environment, investment preference and return performance, in order to deeply analyze the structural differences and causes of venture capital market in the two countries. The study found that the venture capital in China has formed a hard technology-led investment structure driven by the policies, showing the adjustment characteristics of “volume contraction and quality increase”. In recent years, the withdrawal of venture capital has gradually restored the return rate. Canada’s venture capital is highly dependent on the global capital market, focusing on cutting-edge technologies such as AI, but facing limited exit channels and long-term lagging behind the global head level in return. This paper further explains the causes of the differences from the three aspects of policy environment, capital structure and industrial foundation, and puts forward some countermeasures and suggestions for the development of venture capital industry in China, such as optimizing long-term capital supply, unblocking exit channels and strengthening local ecological cultivation, so as to provide reference for promoting cooperation in venture capital field between the two countries.

KEYWORDS: venture capital; Investment preference; Rate of return on investment; International comparisons; Hard technology