With the continuous improvement of the role of innovation and entrepreneurship in China′s economic development, the role of venture capital institutions in promoting the development of startups and scientific and technological innovation has been paid more and more attention. Scientific and technological innovation is characterized by great uncertainty, high risk and light assets, which also lead to the high- risk characteristics of startups, and it is difficult to obtain the funds needed to development through traditional financing channels. Venture capital institutions have the knowledge and skills that traditional financing agencies lack in screening, identifying, supervising and guiding high-risk enterprises, which makes venture capital an important channel for startups to obtain funds. However, the information asymmetry between startups and venture capital institutions will directly restrain venture capital institutions make a high valuation to the startups. To improve the chances of obtaining investment and financing, startups need to send effective signals reflecting their own quality to venture capital institutions.

In recent years, some scholars have begun to study the extent to which patents of startups can affect investors′ evaluation of the economic value of enterprises, and explore the feasibility of using patent as an important indicator to judge the value of startups. Foreign scholars have carried out a series of studies on the impact of patents of startups on venture capital decisions, but there is no unified conclusion. The empirical analysis is mainly concentrated in Europe and the United States and other countries and regions, lack of specific practice for China. Chinese scholars mostly focus on the impact of venture capital on the performance of startups from the perspective of startups. The existing research lacks the perspective of venture capital institutions, focusing on the screening process before venture capital decision-making, and to explore the impact of startups patents on venture capital institutions decision-making.

This study collects the data of patent, risk financing and exit of 400 startups in Growth Enterprise Market (GEM), and carries out empirical analysis, trying to analyze whether the patents can play a positive signal role in the process of venture capital investment for startups, to explore the interaction between the patent resources of startups and enterprise financing. In order to solve the problem of information asymmetry between startups and venture capital institutions, to stimulate and guide the venture capital industry to better promote economic development and social innovation, and to provide practical reference for promoting the innovation and development of startups. At the same time, whether a startup can finance as early as possible is very important for the survival and subsequent development of the enterprise. Therefore, this study will focus on the impact of the patent behavior of startups on the inexperienced entrepreneurs, the first-round financing of startups, and the decision-making of well-known venture investors. 

The results show that: First, the patents of startups have a significant positive impact on the valuation of venture capital enterprises; Second, the positive impact of startups patents on venture capital valuation will be weakened with the increase of investment rounds, but will increase with the promotion of the industry status of venture investors. Thirdly, the financing amount of enterprises is used to replace the venture capital valuation as the dependent variable, As a whole, for venture capital institutions, the patents of startups can play a role of quality signal, which can reduce the information asymmetry between venture capital institutions and startups to a certain extent, so that venture capital institutions can learn more about the technological innovation ability of enterprises, and make startups obtain a higher valuation. The possible innovations and contributions of this paper are as follows: (1) the research on patents and enterprises is expanded from the single patent promoting enterprise technological innovation to the signal of attracting venture capital, which expands the connotation of patent value, and opens a new perspective for patent management and patent strategy of enterprises. For the technology suitable for patent application, patent application should be submitted in time, which can not only avoid being preempted by competitors to complete patent layout, hinder the application of enterprise technology and make enterprises in a passive position, but also improve the possibility of venture capital. (2) in the past, the relationship between enterprises and venture capital was studied from the perspective of enterprises to explore how to effectively use venture capital to promote technological innovation and industrialization of enterprises. It is lack of research from the perspective of venture capital institutions. This study attempts to explore the signal effect mechanism of startups patents on venture capital valuation from the perspective of venture capital institutions and based on the goal of maximizing returns. The research results are helpful to guide venture capital institutions to make more effective use of patent signal mechanism and optimize their investment decisions. (3) The research also provides theoretical support for the government to guide the development of venture capital industry and promote enterprise innovation. However, there are still some deficiencies in the research content of this paper. In the future, we can further deepen the quality evaluation of patent signaling mechanism, the exit return of venture capital institutions, and the interaction between innovation of startups and venture capital.