This study introduces venture capital investment as a variable in underpricing of stock’s IPO. From the theoretical perspective, this study uses four points of view—Certification, Supervision, Adverse selection and Grandstanding theory, to explain the relationship of venture capital investment and underpricing of IPO. In real empirical part, this study takes 125 second-board companies as a sample to research on the relationship among venture capital investment, the characteristics of venture capital and underpricing of IPO. The finding shows that in the second-board market, companies which have venture capital institutions involved show a higher IPO underpricing rate compared to the companies which have no venture capital institutions involved. The main finding is that there is irrational investment behavior in the market.