Based on companies listed on the Growth Enterprise Market (GEM) between October 2009 and June 2013, this paper investigates the relationship between venture capital investments (VCs) and firm performance, the channels through which VCs improve firm performance, and the effect of VC characteristics on firm performance. First, the empirical results show that VCs can improve firm performance, but such improvement only exists in the short term. Second, the empirical results show that such short-run performance improvements come from firms’ EBIT profit margin (PM) rather than from firms’ asset turnover (ATO). How-ever, in the long term, both decreasing from PM and ATO leads to poorer firm performances. Third, the results show that the more the VCs and the more the experience of VCs, the more significant improvement of firm performance. These empirical results show that VCs cannot provide more sustainable growth supports than money to firms.