Exit Decision of Venture Capital Based on Linear Contract in Continuous Time: IPO or M&A

Table 3

Summary of numerical simulation results.

	Influence on exit method	Influence on exit timing
Improve the production efficiency	(i) Make venture capital inclined towards choosing IPO as the exit method. (ii) Make the best exit mode of the VC converge towards the exit mode for maximizing social welfare.	(i) Shorten the IPO exit timing but extend the exit timing for M&A. (ii) Make the best exit time of the VC converge towards the exit time for maximizing social welfare.
Reduce the loan interest rate	(i) Make venture capital inclined towards choosing IPO as the exit method. (ii) Make the best exit mode of the VC converge towards the exit mode for maximizing social welfare.	(i) Extend the exit timing of IPO and M&A. (ii) Cannot make the best exit timing of the VC converge towards the exit timing for maximizing social welfare.
Strengthen risk control	The influence of risk control on the exit mode is not obvious.	(i) It shortens the exit timing of IPO but has no obvious influence on the time of M&A. (ii) Make the VC’s IPO timing converge towards the IPO timing to maximize social welfare.