Abstract: Through manually distinguishing venture capital investment and the capital background, and using data of China's GEM firms, we analyze the effect of venture capital investment's entry, involvement degree, and capital background on start-ups' IPO performance. Results show that (1) the entry and involvement degree of venture capital could significantly improve IPO performance; (2) compared with government-background venture capital, the entry and involvement degree of private and foreign-background venture capital have more influences on IPO performance; (3) while government-background venture capital sends investors the “signal” that the start-up is of high quality, it does not really alleviate the asymmetric information and uncertainty of investors' understanding about start-ups' true value. Additionally, syndicated venture capital investment could effectively improve IPO performance.