We examine the role of venture capitals (VC) in Chinese entrepreneurial firms surrounding their initial public offerings (IPOs) on ChiNext. We find VCs are more likely to invest in entrepreneurial firms close to their registered location. Unlike developed countries, Chinese VCs cannot significantly improve firms' corporate governance and operating performance on ChiNext. These results indicate these VCs are more free‐riders rather than value‐added investors. The empirical findings suggest Chinese government should restructure ChiNext or reform primary market regulations to encourage VCs to make more value‐added activities and improve the financing environment of small to medium‐sized enterprises. VCs are still new on the ChiNext.