Abstract: The "import dependence" of domestic advanced medical equipment is seriously concerned by the Government. President Xi highlights that advanced medical devices should be self-controllable, efforts supposed to be concentrated on breaking through core and key technologies. As an important means for enterprises to acquire heterogeneous knowledge, cross-border merger and acquisition is an internationalization accelerator for latecomer countries to quickly realize technology catch-up and reduce import dependence, and' also a direction for advanced medical device enterprises to realize domestic substitution of core and key technologies. However, due to the differences between countries in political system, cultures, as well as the fact that the medical equipment industry mainly consist of small startups, those enterprises may face the disadvantage as outsiders and newcomers in the process of cross-border mergers and acquisitions (M&A). Therefore, how to help advanced medical device enterprises break through the dilemma and acquire and absorb core knowledge in cross-border mergers and acquisitions is an important way to alleviate the stranglehold problem of core and key technologies of advanced medical equipment Venture capital can affect the knowledge absorption and management ability of enterprises through investment and post-investment management. If the knowledge transfer mechanism of VC can operate effectively, by strengthening the process of knowledge transfer, absorption and application of core technologies in cross-border mergers and acquisitions, advanced medical equipment enterprises are expected to build the innovation capability of core and key technologies. However, there are few literatures to discuss whether the knowledge transfer mechanism of VC institutions plays a role in the relationship between cross-border M&A and core and key technology innovation. For this reason, based on the logic of domestic substitution, this paper accurately identifies the core and key technology breakthroughs in Chinese advanced medical equipment industry, this paper takes Chinese advanced medical equipment enterprises from 2015 to 2021 as samples to investigate the influence of VC participation on the relationship between advanced medical device enterprises' transnational merger and acquisition strategy and core and key technology breakthroughs. Furthermore, the paper examines the influence of VC participation on knowledge acquisition and knowledge absorption of enterprises in cross-border M&A, to explore the operation of VC knowledge transfer mechanism in the situation of cross-border M&A strategy affecting advanced medical device enterprises' core and key technology breakthrough. The results show that VC participation can strengthen the positive impact of cross-border M&A on the breakthrough of key core technologies, and the potential mechanism is to strengthen the knowledge acquisition and absorption of cross-border M&A. The contributions of this paper listed as follows: Firstly, this paper finds that VC can help enterprises break through key core technologies by strengthening the heterogeneous knowledge acquisition and absorption and utilization effect of cross-border M&A, which expand the application scenarios of VC knowledge transfer function. Secondly, the existing literature on core and key technology breakthrough is limited to qualitative research. This paper provides micro-level empirical evidence for the breakthrough factors of core and key technology by constructing the core and key technology breakthrough data set of advanced medical equipment enterprises. Finally, the research conclusions of this paper can provide some theoretical guidance for policy makers to clarify the breakthrough method of key core technologies of advanced medical device enterprises and alleviate the stranglehold problem.