Abstract: As one of the most important intangible assets, reputation should be taken into account when VC firms make investment decisions, while the impact of VC firms’ reputation on their investment decisions has received little attention. The paper studies how a VC firm’s reputation affects its investment decisions by building mathematical models. Our findings show that if enhancement of reputation from completion of a project in the future is taken into account during the VC firm’s decision-making process, the VC firm will have a stronger willingness to finance the project initially, to refinance the project which run into difficulties during the implementation process and make more effort in implementation of the project. However, the pursuit of social reputation will dilute the VC firm’s incentive to provide effort for the financial objective.