Venture capital and its role in financing innovation. Venture capital market. Venture entrepreneurship. Financial investments Equity venture capital and debt capital

Venture capital is generally associated with innovative companies.

Venture capital is capital used for direct private investment, which is usually provided by external investors to finance new, growing companies, or companies on the verge of bankruptcy. Venture investments are usually risky investments with above-average returns. They are also a tool for obtaining a share in the ownership of a company. A venture capitalist is a person who makes such investments. A venture capital fund is an investment vehicle with the formation of a general fund (usually a partnership) for investing financial capital, mainly by third-party investors in the enterprise, which pose too much risk for conventional capital markets and bank loans.

History

While there have been other similar investment vehicles in the past, General Georges Doriot is considered to be the father of the modern venture capital industry. In Doriot, he founded the American Research and Development Corporation (AKIR), whose greatest success was the Digital Equipment Corporation. When Digital Equipment placed its shares on the stock exchange in 1968, it provided AKIR with a profitability of 101% per year. 70 thousand dollars, which AKIR invested in Digital Corporation in 1959, had market value$ 37 million in 1968. Fairchild Semicondactor, founded in 1959 by Venrock Esociates, is generally considered to be the first company to be established with venture capital financing. Prior to World War II, venture capital investment was primarily a sphere of influence for high net worth individuals and wealthy families. One of the first steps towards a professionally managed venture capital industry was the Small Business Investment Act of 1958. This law allowed the US Small Business Administration to license private small business investing companies (KIMBs) to simplify the process of financing and managing US small businesses. This law addressed issues raised in the report of the US Federal Reserve Board to Congress. This report highlighted that there was a large gap in the capital market for long-term development finance for small businesses. The main objective of the KIMB program was and still remains to simplify the process of raising capital through economic system, with the aim of financing small innovative companies in order to stimulate the development of the US economy. Generally, venture capital is closely associated with technologically innovative enterprises, mainly in the United States. Due to structural restrictions imposed on American banks in the 1930s, there was no private merchant banking industry in the United States. This situation was quite unique for developed countries... And only in the 1980s. renowned economist Lester Sarow criticized US financial law for failing to support any merchant bank other than those administered by Congress in the form of federally funded projects. He argued that the banks run by Congress were large in size, carried out political tasks and, as such, concentrated too much on national defense, housing, and areas with specialized technology such as space exploration. agriculture and the aerospace industry. The work of American investment banks was limited only to the implementation of transactions on mergers and acquisitions of companies, the issue of equity and debt valuable papers, and, often, transactions related to the disintegration of industrial concerns in order to gain access to their pension funds, or in order to sell off their infrastructure capital, while obtaining big income... Deficiencies in legislation in this area have been severely criticized. In addition, these industrial policies differed from those of other industrialized countries, especially Germany and Japan, which during this period strengthened their positions in the global automotive and consumer electronics markets. However, unlike the United States, these countries became more dependent on central bank and from the assessments of internationally renowned scientists, rather than from the dispersed method of prioritizing by government and private investors.

Silicon Valley development

In the 60s and 70s. XX century venture capital firms have focused their investments primarily on early-stage and expansion-stage companies. Typically, these companies used advances in electronic and information technology, as well as in the field of medicine. As a result, venture capital financing has become synonymous with technology financing. In 1974, venture capital firms experienced a temporary recession due to the collapse of stock Exchange and, naturally, investors were wary of this new type of investment fund. 1978 was a record high for venture capital. The industry's revenues in 1978 were $ 750 million.

With development market relations in Russia, real conditions are emerging for the creation of risk (venture) capital funds as the most adequate to the specifics of innovative entrepreneurship.

The basic ideas underlying this mechanism in its modern understanding were first successfully tested in the United States in the late 1940s and early 1950s. In the future, interest in risk financing increased for three reasons. First, in a number of cases, investors received real income, which is many times higher than the possible income from traditional credit and financial transactions. Secondly, the specificity of financing objects - high-risk entrepreneurial projects - gave impetus to the development of special management methods that help minimize investment risks. Thirdly, the venture mechanism provided a practical opportunity to finance new innovative ideas and developments at the initial stages of their implementation.

The concept of "venture" (venture) in translation from English means "risk", that is, venture capital is risk capital.

Risk (venture) capital is a special form of capital investment in investment objects with a high level of risk, based on fast receipt high rate of return on invested capital.

The principles of venture financing that reveal its essence include:

Lack of guarantees of return on invested funds (funds are provided for a promising idea without guaranteed provision with existing property, savings, other assets);

Participation of the investor in the management of financed projects at all stages of their implementation, starting with the examination of "raw ideas" and ending with ensuring the liquidity of the shares of the established company, with the help of management company;

A high rate of return on invested capital (up to several hundred percent per annum) is ensured by participation in profits or shares in the authorized capital of the invested company;

Gradual (as the project is successfully implemented) long-term investment;

Financing of unrelated projects.

Venture capital investment is carried out through specially created funds, which are managed by management companies. The investment resources of a venture fund are intended for venture capital companies that have a chance to grow into large and profitable ventures. These odds are combined with the absence of any guarantees of success, especially in the early stages of developing a new product or new technology.

A venture financing strategy based on a strict and pragmatic selection of projects allows you to choose the most effective from a huge number of proposals. Each venture fund is interested in having its capital invested in several venture capital companies ( venture projects) at different stages of development. In addition, venture capital owners wanting to reduce investment risk, distribute it to various industries, and to control the activities of a venture fund, as a rule, appoint “their own” person to the position of a venture fund manager. Arranging financing through a financial intermediary helps to reduce investment risks due to diversification, so it is profitable for investors. The Venture Fund provides the most expensive cash in exchange for property in a venture capital company, that is, by financing a project, venture capital funds become its co-owners, which provides the possibility of subsequent control and management.

For venture capital, unlike credit, firm guarantees are not critical. More important for him is the presence of an attractive and real entrepreneurial idea, as well as management capable of implementing it. Due to the increased risk, venture capital is provided for more than high percent than a loan, as a rule, at least 25 - 35% per annum (the exact rate is set when detailing the investment). Venture capital investments can be divided into groups: start-up, during the development of the company, during the implementation of a certain operation, and others.

1. Initial investment is the most risky form of investment. Sometimes they are divided into two subgroups - pre-launch and actual start-up funding. Pre-start financing refers to the very early stages of a business. An example is the financing of work on the creation of a prototype of a new product, its patent protection, analysis of the sales market and the provision of services, the selection of managers and the formation of the company until the moment when you can move on to start-up financing. Start-up financing is financing to ensure the start-up of a company's production activities. It is assumed that the products have already been designed, a team of managers has been selected, and the results of market research have been obtained.

2. Financing for development is generally divided into financing for its start-up and subsequent stages. The start-up funding is designed to help small businesses with significant growth potential. Given the relatively high degree of predictability of financing results, the risk of capital investments in this case is somewhat less than in pre-start financing, but still significant. Financing at a later stage involves the allocation of funds to enterprises with active production, which have great potential for expansion, for example, through the introduction of a new production line or the creation of a distribution network in new territories.

3. Financing of a certain operation is performed as a one-time act. As a rule, funds are allocated for a very short period (for example, 2 years). Thus, for example, the purchase of enterprises for a specific client is financed, bridge financing is carried out to ensure the activities of the company in the period between other types of financing, and funds are provided for the acquisition of the enterprise by its management personnel.

4. There are varieties of venture capital that are not included in any of the above groups. These include:

Rescue financing, which provides for the allocation of funds for the implementation of measures to ensure the revival of an enterprise - a potential bankrupt;

Substitution financing designed to replace part of the firm's external resources own capital;

Financing operations related to the company's entry into the securities market.

Grade different types venture investment is given in table. 4.1.

Table 4.1

Characteristics of investment types

venture capital

What are the characteristics of venture financing for startups? What is Venture Capital? What does the list of the best venture capital funds in Russia look like?

This information will be useful to those who want to invest in an innovative project, but do not know where to start. And also for those who already have an idea, but do not have the money to implement it.

Once you understand how venture capital works, you will see new opportunities and start your own business.

So, let's begin!

The word "venture" came to the Russian language from English and literally means "risky venture". Thus, venture capital investments are very risky investments.

Why, in the case of venture capital investments, the degree of risk is not just high, but very high? Because we are talking about investing in innovative business, absolutely new technologies, which have no analogues yet.

Example

Investments in railways, auto, mobile communications, computer technology were originally venture capital (although the very definition appeared much later). Now the financing of these industries belongs to the most common classic business.

At the initial or early stage, investors invest in the project, and when the company reaches a consistently high level, a block of shares or a share is sold at a very favorable price.

How big the risk is, so much it will be justified if successful. Statistics show that, despite all the riskiness, venture capital investments are the most profitable and stable for many investors.

Venture investors can be either individuals(most often legal) and entire funds.

Venture fund Is an investment fund focused on working with innovative projects (startups).

Venture capital Is investor capital used to fund startups.

The venture investor receives part of the income from the business and sometimes participates in project management (also not free of charge).

2. How to make money on venture capital investments - 6 simple steps

The success of the case largely depends on the consistency of actions. Make a plan and follow all of its points exactly.

Step 1. Collect the required amount

Without this condition, there will be no beginning. Apparently, you got down to business, already having a certain amount of capital.

Step 2. Determine the direction for investment

Try to do this by focusing on the situation in the stock market. It is good to find an unoccupied niche in the economy. Or you can take an absolutely innovative direction, which is completely unknown and will be the first on the market.

Step 3. We find a promising business and determine its development strategy

When you have selected a project from which you plan to get a solid profit in the future, analyze the activities of the enterprise and thoroughly develop a strategy for its development. This is exactly the case when you first need to think well and then act.

Pay attention to all the nuances. It may be necessary to re-register the company into a joint stock company.

Step 4. We sign the contract

it legal side Affairs. If you are ignorant of legal intricacies, find a competent lawyer. Initially correct design will save you the trouble of correcting mistakes and will be the key to a successful start.

Step 5. Controlling the activities of the company

Many venture capitalists invest their knowledge in the development of the project, help with useful advice and contacts, and take part in planning. They also control the activities of the enterprise.

Step 6. Sell shares on the open market

After a certain time, the project will reach a stable financial position, and the return on investment will reach the expected level. Then you can sell the shares to other investors who prefer to work with minimal risk.

3. Where can an investor look for projects for venture capital investments - 3 useful tips for beginners

Of course, it is easier for a millionaire to find an investment object, but not all are millionaires. However, there are several ways to find a project that suits your needs.

Many aspiring startups don't have initial capital... But the main difficulty is not this, but the fact that they do not have a social circle where there is access to investors.

In this case, a novice businessman begins to attract relatives, friends, acquaintances, etc. That is, you just need to communicate more with people and share information.

Surely through some friends or acquaintances you will meet a person who has a ready-made business idea, but does not have the money to implement it.

Internet to help! Investment sites are not uncommon, and many options can be found in any search engine.

For example, the Investment Projects Exchange portal (inproex.ru) offers assistance in finding both investors and startups. In their competence, even the development of business plans, the exchange of investment projects and other types of cooperation.

Another well-known investment platform - startup.ua - provides an extensive base of projects and forms an investment portfolio. Professional advice on any issues, exchange of experience and knowledge is also in the list of their services.

Tip 3. Visit Collective Investment Platforms

The advantage of online exchanges equity participation the fact that the shares of the project are bought right there on the floor. Thus, the site acts as a guarantor and regulates the relationship between the investor and the startup.

Some of these sites carry out an examination of projects, while others do not consider it necessary to do so. But in any case, both beginners and experienced investors can find startups on equity exchanges.

More about - in a separate material on the site.

4. Review of TOP-7 venture capital funds in Russia

We paid attention to best funds working on the territory of Russia. All of them have existed for more than 2 years and have made at least 3 investments in various sectors of Russian business.

The corporate fund of the Softline group of companies has been operating since 2008 and has a capital of $ 20 million. It is focused on the field of information technologies and specializes in early stage and seed stage startups, bringing them to the level of stable growth.

Among his 13 projects is the Daripodarki.ru online store, which reached a high level in 6 years and was sold to the French company Edenred.

In 2015, the fund completed its largest deal, investing 7 million rubles in the Business Family offline network.

2) ABRT

The fund has existed since 2006 and is betting on a business that develops and sells software. Moreover, he can invest in a startup both at the seed stage and in the growth stage.

The largest projects of the fund are Acronis, KupiVIP and Oktogo.ru.

The founders of the fund, Andrei Baronov and Ratmir Timashev, are famous for the fact that in 2004 they sold the Californian Quest Software for $ 115 million to the company they themselves founded Aelita Software.

It is also noteworthy that at the seed stage the fund can invest up to $ 2-3 million. It also provides entrepreneurs with powerful support, having extensive management experience.

The founder of the fund, Evgeny Gordeev, bases his work on two principles - flexibility and speed. Having entered the IT industry back in 1997, he adapts the concepts of Western projects to the conditions of development in Russia. And half an hour is enough for him to make a decision.

Operating since 2008, the fund has a volume of $ 2.5 million. this moment his most famous startup is Pluso.ru. Completed projects include the Okeo advertising network and the Ogorod community.

It is considered the first early stage fund in Russia. They call themselves the business angel fund.

The main advantage of the fund is that in addition to investments, it provides its partners with contacts and connections. So to speak, it works with "smart money".

The loudest project is DARBERY (group shopping site). Other startups are also involved in online sales and the development of various applications for mobile communications and the Internet.

This fund, which has existed since 2011, can be considered one of the most advanced:

firstly, its specialists have a very fine instinct - they are able to see the potential of the company at the very beginning of its activity; secondly, they focus their attention on the brightest projects; thirdly, the fund provides good support and creates Better conditions for cooperation.

In a word, the foundation sets a high standard, first of all, for itself. Projects financed by him - Dnevnik.ru, Vita Portal, Car-fin.ru and others.

The founder of the fund, Sergei Belousov, focuses on bringing Russian technology companies to the big market. In addition, the foundation generously provides the most valuable resource - knowledge.

The projects in which Runa Capital invests are quite successful. This is largely due to the fact that the team is able to find a common language with a partner and maintain the required distance.

As you can see, Sergey pays great attention to the human factor. After all, in business, too, people, not robots.

7) PBK (Seed Investment Fund)

State fund venture funds since 2009 has been actively developing the venture investment industry in Russia.

Cooperation with this fund will be of interest to entrepreneurs who have taken the latest scientific and technical discoveries as the basis for their business. And also for those who do not like it when the investor is too actively seeking to take part in the management process.

But a great inconvenience in this cooperation will be a huge amount of documentation. It should also be borne in mind that the fund invests only with a venture partner.

The most famous projects are Wobot, Ceramic Transformers, Membrane Technologies.

About that, read the special publication.

We suggest watching a video about the peculiarities of venture capital investment in Russia.

5. Who are business angels and how do they differ from venture capital investors?

The lyrical name, a bit unusual for business terminology, appeared in the 1920s. XX century. This was the nickname for wealthy patrons of art in Europe at that time. They invested in theater productions. Profits were received only if the performance was successful.

Currently, this element has remained, although it has undergone some changes. Business angels invest in projects where they are not only interested in the field, but also where they can apply their own skills.

Often, business angels become not only for the sake of profit, but for the transfer of experience or the implementation of their knowledge in practice. So to speak, for moral satisfaction.

The table below will help you understand the difference betweenbusiness angels and ventureinvestorami:

As a rule, a business angel is an entrepreneur with a solid education and great personal experience... The intellectual side of the project is not the least important for them.

Therefore, most often they invest in high-tech business and internet ideas. According to statistics, one in five of them is a millionaire.

In Russia, "angelic" investment is not yet very developed. Although now business angels are already uniting in networks, of which more than 20 have been recorded at the moment.

There is more detailed material on the site.

6. Conclusion

We have defined the basic concepts and examined the situation of venture investment in Russia. In the next articles, we will continue to study this topic.

Venture capital - the capital of investors intended to finance new, growing or struggling for a place in the market of enterprises and firms (start-ups) and therefore associated with a high or relatively high degree of risk; long-term investment invested in risky securities or businesses in anticipation of high returns. Venture capital is generally associated with innovative companies.

Venture capital is capital used for direct private investment, which is usually provided by external investors to finance new, growing companies or companies on the verge of bankruptcy. Venture investments are usually risky investments with above-average returns. They are also a tool for obtaining a share in the ownership of a company. A venture capitalist is a person who makes such investments. A venture capital fund is an investment vehicle with the formation of a general fund (usually a partnership) for investing financial capital, mainly by third-party investors in enterprises that are too risky for conventional capital markets and bank loans.

While there have been other similar investment vehicles in the past, General Georges Doriot is considered to be the father of the modern venture capital industry. In 1946, Doriot founded the American Research and Development Corporation (ACIR), whose greatest success was the Digital Equipment Corporation. When Digital Equipment went public in 1968, it provided AKIR with a 101% profitability per year. The $ 70,000 AKIR invested in Digital Corporation in 1959 had a market value of $ 37 million in 1968. Fairchild Semicondactor, founded in 1959 by Venrock Esociates, is considered to be the first company to be established with venture capital financing. Prior to World War II, venture capital investment was primarily a sphere of influence for high net worth individuals and wealthy families. One of the first steps towards a professionally managed venture capital industry was the Small Business Investment Act of 1958. This law allowed the US Small Business Administration to license private small business investing companies (KIMBs) to simplify the process of financing and managing US small businesses. This law addressed issues raised in the report of the US Federal Reserve Board to Congress. This report highlighted that there was a large gap in the capital market for long-term development finance for small businesses. The main objective of the KIMB program was and still remains to simplify the process of raising capital through the economic system, with the aim of financing small innovative companies in order to stimulate the development of the US economy. In general, venture capital is closely associated with technologically innovative ventures, mainly in the United States. Due to structural restrictions imposed on American banks in the 1930s, there was no private merchant banking industry in the United States. This situation was quite unique in developed countries. And only in the 1980s. renowned economist Lester Sarow criticized US financial law for failing to support any merchant bank other than those run by Congress in the form of federally funded projects. He argued that the banks run by Congress were large, politically motivated, and therefore overly focused on national defense, housing, and specialized technology areas such as space exploration, agriculture, and the aerospace industry. The work of American investment banks was limited only to the implementation of transactions on mergers and acquisitions of companies, the issuance of equity and debt securities, and, often, transactions related to the disintegration of industrial concerns in order to gain access to their pension funds, or in order to sell off their infrastructure capital, having received at the same time, large incomes. Deficiencies in legislation in this area have been severely criticized. In addition, these industrial policies differed from those of other industrialized countries, especially Germany and Japan, which during this period strengthened their positions in the global automotive and consumer electronics markets. However, unlike the United States, these countries became more dependent on the central bank and on the assessments of internationally renowned scientists than on the dispersed method of prioritizing by government and private investors.

Distribution of roles in a venture capital firm

The main partners of a venture capital firm (also called venture capitalists) are executives, in other words, they are professionals. investment business... Their career experiences may vary, but most of these partners have been CEOs at companies like the ones that finance their partnerships. Venture fund investors are called limited partners. This group of investors consists of very wealthy individuals and institutions with large sums of money. cash capital such as public and private pension funds, university financial funds, Insurance companies, and from the intermediaries of the pooled investment. Other posts at the venture capital firm are provided by venture partners. Venture partners propose deals and only profit from the deals they are working on (as opposed to main partners who profit from all deals).

Fund structure

Most venture funds have been around for 10 years. This model was first successfully applied by the Silicon Valley foundations in the 1980s. to invest extensively in technological trends, but only during the period of dominance, in order to reduce the exposure to management and marketing risks of any private firm or its products. In such a fund, the investor has certain obligations to this fund, which venture capitalists eventually "begin to curse" while the fund makes investments.

Investment objects

Venture capitalists can be versatile or highly specialized investors depending on their investment strategy... Universal investors are venture capitalists who invest in different industries, or in companies, in different geographic locations, or in different stages of the company's life cycle. Alternatively, investors can specialize in one or two industries, or invest only in companies in a specific geographic area. Not all venture capitalists invest in start-ups. Unlike venture capital firms, which only invest in early-stage companies, venture capitalists also invest in companies at various stages of the business life cycle. A venture capitalist can invest before a real product is available or before a company is organized (called "seed investment"), or can provide capital to "launch" a company in its first or second stage of development, also called early investment. A venture capitalist can also provide the necessary funding to help a company outgrow critical financial mass and become more successful (“expansion financing”). A venture capitalist can invest throughout the entire lifecycle of a company, and therefore some funds focus on investing in companies at a later stage, providing financial assistance to help the company outgrow critical mass and attract public funding through stock acquisitions. Alternatively, a venture capitalist can assist in a merger and acquisition by another company, providing liquidity and exit to the founders of the company. Some venture capital funds, on the other hand, specialize in takeover, reform or recapitalization. joint stock companies open and closed type that are attractive to investors. There are various venture capital funds: those that diversify widely and invest in companies in various industries ranging from semiconductors, software, to retail and the restaurant business, and those that specialize in only one technology. While investing in high tech make up the bulk of US venture capital investment and the venture capital industry is attracting a lot of attention. Venture capitalists also invest in construction companies, industrial production, services business, etc. Some firms specialize in investing in retail companies, while others focus on investing only in “socially responsible” start-ups. Venture capital firms come in all sizes, from small multi-million dollar seed finance firms to large firms with over a billion dollars in global investment. The common denominator in all these types of venture capital investment is that venture capitalists are non-passive investors. They take an active and appropriate interest in advising, directing and developing the companies in which they have invested. They want to add value through their experience investing in dozens and hundreds of companies. Some venture capital firms have been successful in creating synergies between the various companies in which they have invested. For example, one company that has a great program but lacks proper distribution technology may partner with another company or management in the venture capital portfolio that has the best distribution technology.

Mobilizing venture capital

Venture capital is not suitable for all entrepreneurs. Venture capitalists usually choose very carefully what to invest in: as a rule of thumb, a fund can only invest in one of the four hundred opportunities presented to it. Funds are most interested in risky ventures with high growth potential, since only such opportunities are most likely to provide financial returns and successful exits within the required period of time (usually 3-7 years) expected by venture capitalists. The need for high returns makes venture capital financing a costly source of capital for companies, and most suitable for businesses that need huge start-up capital and cannot be financed with cheaper methods such as debt financing. This happens most often with intangible assets such as software and other types of intellectual property, the value of which has not yet been verified. In turn, this explains why venture capital is most prevalent in the fast-growing tech industries, as well as in the biotech industries. If the company has the qualities that venture capitalists need, such as a great business plan, a good management team, investment and the enthusiasm of the founders, there is good potential to exit. investment project before the end of the financial cycle, the expected rate of return is at least 40% per year, then it will be easier for her to mobilize venture capital.

Alternatives to venture capital

Due to the strict requirements for potential investments of venture capitalists, many entrepreneurs are looking for sources of seed funding from business angels who will be more willing to invest in risky and at the same time promising projects, or who have previously developed a good relationship with this entrepreneur. Moreover, many venture capital firms will seriously consider investing in unknown start-up companies, only on the condition that the latter can prove at least some of the advantages of their technology, product or service over other peers. In order to achieve this, or even to avoid the dilutive effect of obtaining financial resources to proving these benefits, many start-up companies are beginning to look for ways to self-finance. They do this until they can reach outside investors such as venture capitalists or business angels, and until they have a higher level of trust behind them. This practice is called self-reliance. Since the boom of Internet companies and there is still controversy that there is a gap between investments from friends and family, which usually range from $ 0 to 250 thousand, and the amounts that most venture capital funds prefer to invest - 2-5 million. dollars. This financial gap is widening as some successful venture capital funds have become accustomed to investing large sums money and therefore expect from recipient companies to be more active in the search for investment opportunities. This “gap” is often filled by business angels. The National Venture Capital Association estimates that the latter are now investing more than $ 30 billion in the United States a year. By comparison, venture capital organizations invest $ 20 billion a year. Companies in areas where assets can be effectively securitized because they reliably generate future cash flows or have good potential to resell in the event of a foreclosure can borrow to finance their growth at lower interest rates. Capital intensive industries such as mining and manufacturing are a good example. Offshore financing is provided through dedicated venture trusts that attempt to use securitization in the structuring of hybrid multi-market transactions through specialized divisions of the enterprise - divisions of the corporation created specifically for the purpose of funding.

As defined by the US National Venture Capital Association, “Venture capital is financial resources provided by professional investors who invest in young, fast-growing companies with the potential to transform into companies that make a significant contribution to the economy. Venture capital is an important source of own funds for start-up companies ”[Hagerty].

Venture Are special economic relations, in which the participation of the investor in the management and transfer of business experience, useful connections and skills to the founders of the company plays a key role in the success of companies. It is these “smart” investments that help young companies to pass through the “valley of death” - a period when the very existence of the company is in question [Kashirin, 2007, p. 21].

Venture capitalists acquire a stake in the companies in which they invest. These investments are long term (usually 5 to 10 years). Venture capitalists do not require full control over the company and are not interested in paying dividends. Venture capital investment is based on the principles of phased financing, interest-free funds provided, patience with the growth of the enterprise, close cooperation between venture capitalists and enterprises created with their participation.

Although venture capitalists are direct investments, venture capital funding itself can come in various forms:

• ordinary shares;
• preference shares;
• credit;
• hybrid instruments.

In Russia, the provision of investment in the form of a loan is especially widespread due to the peculiarities of joint-stock and tax legislation... The fact is that the authorized capital of innovative start-ups, which are usually registered as limited liability companies or closed joint stock companies, in most cases are nominal values ​​and are close to the minimum, determined by laws, sizes. This is caused by:

• features accounting and taxation;
• a small amount of assets and cash from the founders of companies (most often the main asset of entrepreneurs is intellectual property, which is not put on the balance sheet);
• the possibility that receiving a large investment can bring enterprises out of the preferential tax regime (simplified taxation system, incentives for small businesses on income tax).

In such a situation, in practice, the following solution is the most common. The investor provides in the form of a contribution to authorized capital exactly the amount that is required to provide his share, and the rest of the funds are given in the form of a long-term unsecured loan with preferential interest rate... According to the legislation, there is a fundamental possibility of converting a loan into shares or bonds.

In addition, providing financial resources in the form of debt is beneficial to the owners of the company, since the payment of interest on debts is not taxed and lowers the amount of taxable profit (“tax shield”) [Firsov, 1994, p. 93].

Venture capital, combining various forms of capital (equity, loan and entrepreneurial), acts as an intermediary in relations between investors and companies in need of financing.

In a number of works, for example [Sergienko, 2006, p. 115]), venture financing is viewed as a hybrid form of providing innovative companies with the necessary investments. This form should combine effective elements of the functioning of both capital markets and banks.

Rice. Organization of venture investment

Essentially private equity, venture capital investments have specific features that differentiate them from other types of investments. These features are as follows:

1. Venture investors (venture capitalists) act as financial intermediaries by attracting capital from investors and investing it directly in the shares of companies included in their portfolio.
2. Venture capitalists only invest in private companies that are not listed on the stock market.
3. Venture capitalists play an active role in the management of companies, providing them with the necessary assistance and monitoring their activities.
4. Venture investors derive their main income when they exit the capital of financed companies by selling their shares to strategic investors or on the stock market (if the company enters stock market through the initial public offering of shares).
5. Venture capitalists take a founding approach to company profits by investing in their organic (internal) growth.
6. To mitigate the risk, venture capitalists invest in the companies they finance in stages.

The venture capital market can be divided into three segments:

• "Classic" or institutional venture capital, which will be discussed in this part of the work;
• informal venture capital (business angels), discussed in the fourth part of the manual;
• corporate venture capital, discussed in the fifth part of this tutorial.

The characteristics and distinctive features of these segments are shown in the table.

Table. Main characteristics of the three segments of the venture capital market

A source: .

Why is venture capital so important for the innovative development of the economy? This is due to the following factors:

• First, the venture capital business plays the role of a milestone, marking the most promising areas of technological development. Attracting venture capital serves as a signal for banks, large corporations, and the state about the possibility of obtaining high returns from investment objects. Thus, there is a redistribution of total capital in favor of the most promising sectors of the economy (technologies).
• Second, venture capital stimulates competition by pushing corporations to more innovative activity. This ultimately increases the innovative capacity and competitiveness of the economy as a whole.
• Thirdly, the venture business forms (especially in conditions transition economy, in emerging markets) new ideas about values ​​and business ethics, new models of business organization. The importance of personal initiative and creativity is growing. Motivation at the initial stages, not related to making a profit, is of particular importance. An example of such new business organization models is internal corporate venture, which will be discussed in other sections.
• Fourth, an investment mechanism is being created that is adequate to the needs of rapid development based on revolutionary changes in technology. This mechanism, although complex, has the flexibility to respond quickly to innovation.

Researchers of the venture business, emphasizing the low share of venture capital in the structure of financing innovative projects, note its key role as a “point of growth” for new sectors of the economy. Indeed, the share of venture capital in the total investment of the economy seems insignificant even in the United States, where this type of investment has been most developed. However, despite these rather modest data, the role of venture capital in economic development can hardly be overestimated.

According to the National Venture Capital Association of the United States and think tank Global Insight, American companies that used venture capital between 1970 and 2005, combined created 10 million new jobs and generated more than $ 2.1 trillion in revenue. Now they employ 9% of the workforce in the US private sector and create 16.6% of the gross domestic product [Nastas, 2007, p. 50].

Rice. Share of venture capital investments in the US economy

Venture capitalists invest in new high-tech ventures (start-ups), but their main merit is that they allow growing companies based on new technologies to enter the stock market through an initial public offering (IPO). It is these companies that subsequently determine the standards of both technological development and living standards. “The rise of the venture capital market happens on a different basis each time. During the depression, the sector is consolidating, old technologies are finally commoditized, and research is taking a step forward. A few years later, the breakthrough is repeated, at a different level and technology. The basis for the boom of the 1960s. there was microelectronics, for the boom of the 70s and 80s - personal computers, for the boom of the 90s - the Internet. Undoubtedly, mobility and wireless technologies have been the favorites of the last few years ”[Ammosov, 2004]. Thus, it is the venture business that largely determines the contours of technological development.