A Brief Discussion on the Model and Application of Signaling and Screening

The article tries to apply the model of signaling and screening to venture capital (VC) and solve the problems of adverse selection of the investor of VC and moral hazard of ventrue entrepreneur,which are caused by information asymmetry. Part puts forward the concept of signaling and screeing,explains how adverse selection and moral hazard emerge and their harmfulness,pays attention to the application of the model of signaling and screening to VC and makes efforts to eliminate the negative influences of adverse selection and moral hazard.