Abstract:Innovation needs financial support. In the process of basic research and the transformation of applied technology, finance plays an important role. The risk appetite of the traditional financial system, however, fails to match with the financial demand of technology innovation. By contrast, venture capital fills the gaps in meeting the demand for funds, and simultaneously, plays the role of value discovery, guides the direction of research and development, and so on. In recent years, while China’s venture capital has developed rapidly, the venture capital system still needs to be improved. This study compares and analyzes the global representative models including the United States, Europe, Japan, and Singapore. From the experience of countries with leading venture capital development, the effective integration of state-owned capital and private capital can build a more comprehensive venture capital system. China’s state-owned capital and private capital have their advantages, but they fail to form collaboration and complement each other in practice, resulting in insufficient support for fundamental science and technology startups, and, more significantly, the mismatch between the urgent demand for technology innovation and the supply cycle of venture capital funds. Therefore, the future reform shall focus on promoting the effective integration of state-owned capital and private capital, and, incrementally, establishing a Chinese version of venture capital system with high openness and inclusiveness for the whole life cycle of science and technology enterprises.