Abstract: In the past 30 years, China's venture capital industry has achieved a very high growth rate and huge volume of transactions in a short period of time. It has become the most remarkable venture capital market in Asia and even the whole world nowadays. Therefore, this paper attempts to analyze the reasons for the rapid development of China's innovation and entrepreneurship ecosystem under the framework of Evolutionary Economics theory. Based on the venture capital infusion, investing and exiting chain, this paper argues that innovation and entrepreneurship ecology, venture capital fund ecology and multi-level capital market ecology are interlinked. In practice, the development and construction of China in these three ecological systems are also interlinked, which therefore form a circulating cumulative effect and strengthening the system. It is the cumulative force that promotes the entire innovation and entrepreneurship ecosystem in China and builds a spiral development trend.