An Institutional Study on Venture Capital in America

This paper points out that it isn't venture-capitalists and venture-entrepreneurs who can explain the rise of the New Economy in America,but the institution ,of which venture capital (VC) is the most important,that does.And the paper analyses why the traditional capital market became inefficient with venture-enterprises;further the paper explains how VC mechanism deals with adverse selection and moral hazard;finally a conclusion comes that institutional innovations are due to the rise of New Economy in America.