Using period resonance gain structure, a laser diode (LD) pumped 980 nm vertical external-cavity surface-emitting laser (VECSEL) with active region of InGaAs/GaAsP/AlGaAs system is developed. The characteristic parameters such as longitudinal confinement factor, threshold gain, optical gain and output power etc. are calculated through theoretical model. With the optimized characteristic parameters, the structure of VECSEL is designed. Theoretical calculations show that the output power of a LD-pumped VECSEL can be higher than 1.0 W.