Many researches have emphasized that it is necessary for the government to support the venture capital industry. But few studies exist about the rationale of the government support for venture capital industry. In Particular, despite of its fundamental characteristics of capital operation, very few studies provided the rationale of the government support in terms of financial management. The purpose of this study is to analyze theoretically the rationale of the government support for the venture capital industry and to provide optimal subsidy structure. For this purpose, venture business and venture capital are defined uniquely in this study ; venture business as business opprotunity with technical externality in terms of public economics, and venture capital as the capital invested on venture with the technical externalitiy. In case the business has technical externality like venture business, investors experience the gap between private and social rate of return. The government support for the investors(venture capital) is justified on the basis of filling this gap to equalize social and private rate of return. Meanwhile, the optimal government sudsidy is aimed to minimize the cost of the government support which is determined by business opportunity. The optimal support policy is also determined according to the specific values of their costs.
