Principal-agent theory in venture business

Agent distortion issue occurs as traditional Holmstrom- Milgrom model is applied to venture business. To wipe out this difficulty, this paper does reconstructions and extensions towards classical principal-agent theory, brings forward ob-endeavor theorem, validates moral hazard with hidden action, and discovers synergy effect of the endeavor level towards endeavor effect index through calculating long-term endeavor of venture entrepreneur by Newton method and computer graphics.