Based on the data of GEM listed companies, this paper makes an empirical study on the effect of participation of venture capital institutions and its characteristics on earnings management before IPO. The study finds that the participation of venture capital institutions can positively certify and supervise earnings management before IPO. In China, venture capital dominated by government capital plays a more positive role in certification and supervision. Likewise, the reputation and quantity of venture capital institutions play a greater role on earnings management before IPO. Higher reputation and more venture capital institutions lead to lower earnings management before IPO. There is no significant relationship between the institutional ownership and earnings management.