The age of National Strategy of Innovation-Driven Development provides new development opportunities for venture capital in China. Venture capital, as the important carrier of enterprise innovation, on the one hand, is the principle source of initial funds for start-up enterprises; on the other hand, it can alleviate enterprise moral hazards and the problem of agencies with its unique resources and value-added services. In recent years, scholars mainly focus on the study of the characteristics of venture capital institutions and their roles in invested enterprises, and the externality of venture capital has been ignored. Therefore, for China’s real economy, whether venture capital can contribute to positive spillover effects or not, venture capital plays the role through what channels, and is affected by which internal mechanism, all of these questions need to be researched and answered.　　Based on the condition that venture capital can effectively alleviate the enterprise agency problem, this paper links the mechanism of knowledge spillovers and the spillover effects of foreign direct investment, and summarizes four channels to the spillover effects of venture capital—the technology innovation, talent cultivation, scientific competitiveness and technological diffusion. According to these channels, we construct three spillover variables: horizontal, forward and backward spillovers, and make an empirical research on the spillover effects of venture capital with the data of Chinese listed companies from 2008 to 2015. What’s more, we try to explore the internal mechanism which restricts the venture capital spillover effects.　　The result of the empirical research shows that venture capital has significant vertical spillover effects under the three methods of estimation. It performs as that venture capital can promote the development of both upstream suppliers and downstream distributors, making higher total factor productivity. The paper fails to discover the horizontal spillover effects of venture capital. Further studying finds that the absorptive capacity of enterprises and the degree of the competition within industry play significant roles in the horizontal spillover. The technical threshold restricts intra-industry enterprises to absorb new knowledge, and then inhibits the horizontal spillover effects of venture capital. Moreover, intense competition may force companies with outdated technology in the same industry face elimination risks and also weaken the horizontal spillover of venture capital. It seems that the monopoly market structure is more conducive to knowledge spillovers, reflecting the MAR externalities. However, the competition is not the only one side. As Jacobs externalities theory says that intense competition optimizes the market structure and improves the cooperation, which is beneficial to the raise of vertical spillovers.　　The contributions may lie in the following three aspects: in terms of theory, the paper studies the venture capital spillover effects on the intra-industry and inter-industry, and offers a brand-new thought for the venture capital related research. In research methods, the paper uses three methods to estimate total factor productivity with the micro panel data, effectively alleviating the endogenous problem when estimating total factor productivity, and eliminating the interference of other invisible factors by combining the two-stage estimation method. In practice aspect, innovation entrepreneurship is the main melody of the present economic development in China, so venture capital plays an important role in encouraging innovation and stimulating entrepreneurship. Based on the analysis of channels of the venture capital spillover and the related affecting factors, this paper also finds three key factors of giving full play to the venture capital spillover effects—to promote enterprise innovation and cooperation, to maintain the vitality of the competitive market, and to ensure the healthy development of the talent market.