Abstract: Based on the quasi-natural experiment of the implementation of government-guided fund fault-tolerance mechanism, this paper applies the multi-period DID method to conduct policy evaluation. Our main findings are as follows. First, fault-tolerance mechanism promotes the governmental-guidance fund to invest early and early technology start-ups in the first year, and decreases the investment next year, the opposite policy effects are robust. Second, the influencing mechanism shows that the fault-tolerant mechanism improves the risk-bearing level and use efficiency of the guide fund in the first year, but reduces the risk-bearing level of and has no significant effect on the use efficiency of guiding fund next year. Third, we study the heterogeneity to show that experienced fund management institution reduces the positive effect of policies in the first year and next year, while the fund with limited partnership promotes the positive effect of policies in the first year. Last, we further show that the fault tolerance mechanism improves the investment in the active venture capital areas and early-technology entrepreneurs in the other province; The mechanism depresses the investment in early start-ups that is in the active venture capital areas in the following year. We conclude that the incentive effect of fault-tolerant mechanism is a "flash in the pan". Therefore, local government is necessary to optimize and adjust fault-tolerance mechanisms to make the implementation of policy effective, and formulate more precise and effective measures to ensure that policy implementation is consistent with policy intentions.