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　　The efficiency of exit for the venture capital fund - capital provider relationship complements its efficiency properties for the portfolio firm - venture capital fund relationship. Taken together, they provide a strong rationale for exit from individual portfolio investments as a central component of a viable venture capital industry.
　　Cumming and MacIntosh also provides a general theory of venture capital exits: 揳 VC will exit from an investment when the projected marginal value added as a result of its efforts, at any given measurement interval, is less than the projected marginal cost of these efforts.?they believe that VC value added will decline over time until it is equal to or less than maintenance costs. VC value added will be greatest at the start of the investment relationship, when the VC is most likely to be able to bring managerial and financial discipline to the enterprise, help identify and implement product development strategies, identify legal, accounting and marketing expertise, and so on. However, the ability to add value will decline over time as the firm matures, management becomes more seasoned, the most pressing product development and marketing issues have been worked out, and the firm抯 various business contacts (including legal, accounting, investment banking, marketing channels, suppliers, and customers) have been put in place. In the normal course of events, the value added will decline to the point where it equals or exceeds the maintenance costs.
　　III. The Methods for Venture Capital to Exit
　　Most venture capitalists exit from investments in one of four ways: (1) sale or distribution of shares after the portfolio company completes an initial public offering (IPO); (2)sale of shares pursuant to an acquisition of the portfolio company; (3) in secondary sale VC sell its share to strategic acquiror;　(4) redemption of the venture capitalist抯 shares pursuant to a contractual 損ut?right; or (5) write-off of the portfolio company and concomitant distribution of cash.