Venture Capital Law in China by Lin Lin, Cambridge University Press, 2021. 356 pp. Hardcover: £ 85.00

Despite having a relatively short history as compared to its western counterparts, China’s venture capital (VC) market witnessed an impressive growth in recent years. With 29.4 per cent of global VC injected into Chinese start-ups in 2018, China’s VC market has become the second largest in the world in terms of deal value, attracting both domestic and foreign investors with immense opportunities and ever-increasing technological innovation. However, the law and practice of VC in China has not been sufficiently examined in academic writings despite its size and significance as well as the immense potential for legal research. There was a lack of discussion from a legal perspective as to how the Chinese government played a role in engineering its domestic VC market. In this regard, as a valuable and timely contribution to the scarce scholarship on the Chinese VC industry, Venture Capital Law in China fills the gap in the literature with sophisticated and systematic case studies of China. Through an in-depth comparative analysis of the VC markets in China and the United States (US), the author highlights the distinctive legal features observed in the creation and the development of the Chinese VC market, thus providing VC scholars, policy makers, and practitioners with insights into this significant yet poorly understood sector. Structurally, the book begins with a useful and pertinent introduction to the VC market in China (p 1–43). Chronologically dividing the historical development of the Chinese VC market into five periods, the author argues that the Chinese government has adopted a top-down approach characterized by a regulatory framework consisting mainly of piecemeal interim regulation to ensure the simultaneous availability of investment capital, specialized financial intermediaries, and entrepreneurs – the three essential factors presented in Ronald Gilson’s ‘simultaneity problem’ in the engineering of a VC market. The following chapters of the book provide a detailed examination of the main stages of a standard VC life cycle including fundraising (p 44–142), investment (p 143–212), and exit (p 213–304) through the lens of the VC market in China. Unique features that exist in VC practice in China have been identified and analyzed in each of the stages. For example, the author includes an in-depth account of the prevalence of the valuation adjustment mechanism (‘VAM’) agreements in VC contracting in China, which is one of the many peculiar characteristics that distinguishes it from its international counterparts (p 177–185). The author further discusses the reasons for the prevalence of this special contractual design as well as the associated problems (p 186–207) in the context of