This paper investigates the impact of geopolitical situation on the dynamics between Government Venture Capital (GVC) and Private Venture Capital (PVC) investments. Exploiting the US-China trade war since 2018, we observe that PVCs in China became less likely to invest in GVC-funded startups under heightened geopolitical tensions, and the effect is stronger for more prominent GVCs. However, in areas with significant government subsidies such as high-tech industries, GVCs' involvement serves as a compelling signal to private investors such that the negative impact is mitigated or even reversed. Our findings contribute new insights to the fields of strategic management and international business by elucidating how venture capital strategies adapt in response to geopolitical risks. The study also provides valuable guidance for practitioners and policymakers navigating complex global investment landscapes.