With the rapid development of the economy in China, the Chinese stock market, also become more mature for financing and investing. Among them, the Shanghai Stock Exchange1, as the most representative stock market, had 954 listed companies by the end of February, 2013. During this process, IPO has played a vital role. Nowadays, the high level underpricing and some fresh concepts of stock IPO not only have attracted more attention and capital, but also more academic studies. As is known to all, the rational IPO price is the key factor of success to the stock itself and the whole capital market. Underpricing may benefit the initial investors and shareholders, but it would overdraft the enterprise intrinsic value and block the healthy development of the Stock Exchange. After the improvement of market environment and assistance of economy acceleration through all these years, the IPO price in SSE began to regress to a rational level. Although the progress includes an increasing number of falling on the first day of issuing, which could be seen as a failure of IPO to some extent, it is still an active signal for future development, because it has changed the high level underpricing in the capital market. The results of some studies on IPO of the Chinese market show that more enterprises are making the venture capital as their main shareholders, which is firmly related to the update of operating thought and mode of Chinese enterprises. Generally, the venture capital would not join in the daily operation and management of enterprise. However, most of it could push the IPO price up and cash its share out in a short time after IPO. Besides some basic research, this article mainly concentrates on finding out the relationship between the venture capital and overpricing of IPO and to verify the rationality of the IPO price. This paper starts from the relative concepts and background, and then designs the methodology and conducts empirical studies. Lastly, the conclusion and advice are practical parts in this article.