Collection output:

VENTURE BUSINESS IN RUSSIA AND ABROAD

Khmelev Igor Borisovich

Ph.D. econ. Sciences, Associate Professor department World Economy, Moscow State University of Economics, Statistics and Informatics, Moscow

VENTURE BUSINESS IN RUSSIA AND ABROAD

Khmelev Igor

Ph.D., Assoc. Department. The global economy of the Moscow State University of Economics, Statistics and Informatics, Moscow

ANNOTATION

The article focuses on the fact that one of the promising and interesting methods for developing the Russian economy is investing on the basis of venture capital. The concept of venture financing is revealed in more detail. The following is a brief overview of Russian and foreign experience.

ABSTRACT

The article focuses on the fact that one of the most promising and interesting methods of development of the Russian economy is to invest through venture capital. More detail reveals the concept of venture capital financing. Here's an overview of the Russian and foreign experience.

Keywords: venture business, venture firm

Keywords: venture business, venture firm

The history of the world economy throughout its development has strived, on the one hand, for unification and general globalization, and on the other, for a general division of labor, which ultimately led to the global distribution of labor and resources. IN modern world All countries in the world belong to one region or another. It largely determines the prospects for the further development of the country. As a result, it is very important to understand what you can bet on in order to make a rapid economic leap, which is very important for our country.

The Russian Federation is the largest country in the world, thanks to which it has a huge reserve of raw materials. At the same time, despite the gradual development of the domestic economy, its pace leaves much to be desired, for which new ways and methods of economic development should be found. One of the promising and quite interesting methods of actively injecting new investments into the Russian economy is venture capital, which has its own characteristics and advantages.

Venture financing is an active investment of small and medium-sized businesses, in which there is a fairly high risk of non-return of the funds spent. The name itself comes from the English “venture”, which translates as a risky enterprise, so this type of investment has its own specifics, which, accordingly, gives it its own characteristics. At the same time, venture financing has its own history, as well as experience, which should be considered in more detail. This will allow us to identify all its advantages and disadvantages, making a conclusion about the possibility of using this method in Russia.

Financing based on venture capital consists of the implementation of proposals for the development of commercial, industrial, economic or other activities that the region needs for its successful development. It is important to note that as a result of such investment, funds can be used both to support and qualitatively transform existing enterprises, and to create new production capacities. At the same time, an investor or sponsor is usually well aware of the fact that the probability of non-return on invested funds is quite high, since the investment goes into obviously risky industries.

It is interesting that the objects of venture financing are often commercial ideas, as well as various projects that imply their immediate implementation in the very near future. The main components of a venture financing fund are:

· determination of the territory and scope of activity, including the collection of data on the economic situation, the formation of a specific bank of required objects, as well as the search for new investment projects;

·formation of an effective and reliable system for replenishing monetary and other resources necessary for the implementation of venture investment in projects and their implementation;

·organizational activity, which consists of analyzing the market, conducting a number of examinations to evaluate it, and searching for profitable ideas and projects.

It is important to note that at the center of the investment project there is usually a specific entrepreneur, so all interaction does not take place from the position of “capitalist - entrepreneur”, but rather as “entrepreneur-entrepreneur”. The owners of venture capital usually simply pour funds into certain projects, but control over their rational and successful use falls on special elected officials. At the same time, one must always remember about the great risk on the part of the investor, which he always takes consciously and sometimes even with a certain amount of adventurism.

If we start with the United States of America, then from the very beginning of its inception, which is the 50-60s of the twentieth century, venture investment has developed unevenly. The founders of this business are considered to be American capitalists Tom Perkinson, Frank Cofield, Brooke Byers and Eugene Kleiner. It was they who developed the main concepts of venture financing, where the work was carried out on a specific partnership agreement, providing for the rights, obligations, as well as possible risks from the enterprise. A venture capital institution can be founded either as a separate company or as a limited partnership, and there is always a parent company, which is entitled to an annual compensation of 2.5-3% of the initial obligations of its investor. In addition, such a company counts on the so-called carried interest - a fixed percentage of profits (about 20%).

It is noteworthy that, despite the great risk, the number of investors is currently not decreasing at all. Moreover, if you carefully analyze the formation of global capital, then in many ways it was venture financing that contributed to scientific and technological progress and the rapid development of information and computer technologies. The following example is very illustrative. In 1957, engineer Eugene Kleiner invented the silicon transistor, for which he was awarded Nobel Prize. At the same time, his boss William Shockley was not very happy with the invention and did not understand all its prospects. Investor Arthur Rock became interested in the new device and, with the assistance of a number of other influential people from Wall Street, met with the inventor and invited him to found his own company in southern California. A total of about $1.5 million was allocated for the project. A few years later, the small company turned into a large corporation, Fairchild Semiconductors, which became the first in the territory of today's famous Silicon Valley.

Another successful example of venture capital financing in the United States is the founding of the famous Hewlett-Packard company, which became possible only because one of the employees, Tom Perkins, the inventor of the gas-pumped laser, decided to invest his $10,000 in non-profits. new house, and to founding his own company. As a result, today we see one of the successful and steadily growing world-class corporations.

The most promising sectors for investment in the Russian economy can be considered wood processing, production of dairy and fermented milk products, wholesale trade, fish and meat processing, motor transport, production of building materials, tailoring, as well as chemical industry(production of plastic, packaging, and so on). In general, there are 32 main types of activities into which venture capital is pouring most actively. The average investment size is approximately $2 million, with fluctuations ranging from $0.5-$4.5 million. It is important to note that venture capital consistently gravitates towards the more industrially developed northwestern region of our country.

An important feature of Russian venture capital is that their main shareholder is the EBRD, through which all financial investments pass. At the same time, our economy currently has a rather specific structure, which indicates the strengthening of large national companies through the absorption of medium-sized businesses.

Considering all of the above, investing money in the economy of the Russian Federation is quite risky, so many investments in this direction are classified as venture capital. At the same time, few deny that our country has enormous scientific and technical potential. With proper financing, as well as competent management, it can bring considerable profit to the investor. Huge reserves of ore materials, oil and gas, virtually inexhaustible forest reserves, as well as vast territories attract potential investors: they are not afraid to take risks and invest in the domestic economy.

To summarize the above, it should be said that venture capital very often became the main impetus for the rapid development of existing production processes, as well as the emergence of new ones. The main example of this is modern information technology. Their colossal capabilities would have been difficult to imagine 25 years ago. So the Russian economy is today a fairly attractive field for enterprising Western investors. It is thanks to them that the country has the opportunity to make a qualitative economic leap and once again become a powerful Eurasian power.

Bibliography:

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2.Bebris A.O. Assessing the competitiveness of online stores. Economics and entrepreneurship. - 2013. - No. 11. - p. 901-904.

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4.Bebris A.O. Development of an innovative development strategy as a mechanism for ensuring the competitiveness of a venture firm. Dissertation for the degree of Candidate of Economic Sciences / Moscow State University Economics, Statistics and Informatics (MESI). Moscow, 2011.

5.Bebris A.O. Development of an innovative development strategy as a mechanism for ensuring the competitiveness of a venture firm. Abstract of the dissertation for the degree of Candidate of Economic Sciences / Moscow State University of Economics, Statistics and Informatics (MESI). Moscow, 2011

6.Bebris A.O. Modern Features functioning of venture firms: general economic situation. In the collection: Management model for a knowledge-based economy, materials of the V international scientific and practical conference. Institute of Management, Department of General Management and Entrepreneurship. 2013. - p. 9-13.

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Most economists, when defining this concept, point to the origin of the word “venture” from the English “venture” - “a risky enterprise or undertaking.” There are two types of definitions. Definitions of the first type associate the concept of “riskiness” with the lack of guarantees for venture investments against possible loss by collateral or mortgage. Venture Funding – Allocation Money from venture capital to small research or development firms for the development, refinement and implementation of innovations that are risky but promising. Another group of definitions connects the concept of “riskiness” not only with results (as definitions of the first type), but also with the system of functioning of venture investment as a whole, when the investor shares risks with the entrepreneur. Terminological disputes regarding the definition of “venture entrepreneurship” can also be found in Western countries. But here they have a different content, which, in our opinion, is most successfully revealed in the book by K. Campbell “Venture Business: New Approaches.” In it she notes that terminology is hardly able to give a clue. In a broad sense, private equity refers to the provision of capital to non-public companies, and includes venture capital, leveraged buyouts, and other private financing instruments. In the US, they are practically worlds apart. Unlike the US, in Europe the term "venture capital" has historically been used to refer to all forms of private equity investment. Buy-out shops that own mature businesses such as bars, publishing groups and large chemical plants are called venture capital firms. This sounds very strange to Americans because they consider these to be completely different industries. Therefore, we consider it necessary to give the definition of venture entrepreneurship, which, in our opinion, is the most complete and relevant. Venture entrepreneurship is the activity of organizing mediation between a venture investor and investment recipient firms, aimed at sharing risks between all subjects of contractual relations and making a profit through “exit”. Further in this work we will use this definition.

The difference in the definition of the concept of “venture entrepreneurship” arose, first of all, as a result of the specific system of functioning of this mechanism. The basic principles were laid down at the initial stage of the formation of venture capital by the founding fathers of the industry - Tom Perkins, Eugene Kleiner, Frank Cofield. The main source of the venture capital institution are limited liability partnerships (Limited Liability Partnership - LLP), the basic principle of which is as follows. Investors called limited partners—which include organizations such as pension funds, insurance companies, banks, university endowments, charities, corporations, and wealthy individuals—contribute capital to the fund for a fixed term existence, managed by a venture capital firm, i.e. general partner (General Partners - GP). The widespread use of limited partnerships is due primarily to tax advantages (a limited partnership allows investors to report their investments as a “direct investment in a company” rather than paying twice (once when the fund realizes a capital gain on the sale of assets (capital gains), and the second time - when they themselves receive income)), as well as the convenience of this form of management and the relative ease of registration.

If from a legal point of view the venture mechanism is a fairly simple system, then its economic content requires explanation. The very term “risky” implies that in the relationship between the capitalist-investor and the entrepreneur claiming to receive money from him, there is an element of adventurism. Risk investing is usually carried out in small and medium-sized private or privatized enterprises without them providing any collateral or pledge, unlike, for example, bank lending. Venture funds or companies prefer to invest capital in companies whose shares are not publicly traded on the stock market, but are completely distributed among shareholders - individuals or legal entities (unquoted or unlisted companies). Investments are directed either into equity investment of closed or open joint-stock companies in exchange for a share or block of shares, or are provided in the form of an investment loan (debt financing), usually for a medium-term period by Western standards from 3 to 7 years ( interest rates for such loans they are either not established or constitute LIBOR + 2 - 4%). In practice, however, the most common form of venture investment is a combined one, in which part of the funds is contributed to the share capital, and the other is provided in the form of an investment loan. A venture investor, as a rule, does not seek to acquire a controlling stake in a company, which allows entrepreneurs to maintain a constant desire to develop the company. And this is its fundamental difference from a “strategic partner” or simply “partner”. The goal of a venture entrepreneur is different. He plans to make a profit only when, 5–7 years after the investment, he is able to sell his stake at a price several times higher than the initial investment (the sales process itself is called “exit”), that is, a venture capitalist is not interested in the long-term strengthening of the company and prefers to reinvest all interim profits received into the business rather than pay them out in the form of dividends. The period of the investor’s stay in the company is called “living with company”. Based on the above, we propose to refer to diagram 1 of the appendix, which reflects the process of existence of a venture entrepreneur.

The formation of new funds is the initial (and at the same time the final) link in the life cycle of a venture capitalist. If an entrepreneur's failure to find venture capital can lead to the bankruptcy of his company, then for a venture capitalist the lack of a new fund is certain death. The fund is a kind of indicator of the activity of a venture entrepreneur. Leading entrepreneurs tend to form large foundations and work with investors such as global endowments and philanthropic foundations. The search and selection stage (search, screening and deal-flow) deserves special attention. It is the ability to filter promising transactions from the chaos of business proposals that is critical important aspect work of venture capital firms. The financial risk of a venture capitalist can only justify an above-average return on invested capital. Return on invested capital (Internal Rate of Return-IRR) is a generally accepted metric for measuring remuneration. In the European and British venture capital associations, it is considered the standard for assessing the profitability of an investment project. While the Russian market for small and medium-sized businesses is absolutely illiquid, calculating the IRR indicator is quite difficult, if not useless. The effectiveness of the assessment is determined by a long and difficult process of mutual “courtship”, which is called “careful observation” or “study” (due diligence). The importance of this stage is also proven by the special system of classification of companies wishing to receive investment.

• 1. Seed (a company for sowing), essentially this is just a project or business idea that needs to be financed
• 2. Start up (newly established company) – a newly formed company that does not have a long market history.
• 3. Early stage (initial stage) - companies that have finished products and are at the very initial stage of their commercial implementation. 4. Expansion (expansion) - companies that require additional investments to finance their activities.

In addition to those listed above, investments from venture funds and companies can be used for:

• 1. “Bridge financing” (building a bridge) – financing for the transformation of companies from private to open joint-stock companies.
• 2. “Management buy-out” - MBO (managerial buy-out) – investments for managers to acquire existing production facilities or businesses in general.
• 3. “Management buy-in” (buy-in by external managers) – financial resources, provided by a venture investor to an outside manager for their acquisition of a company.
• 4. “Turnaround” – financing of companies experiencing certain problems in their trading activities.
• 5. “Replacement capital” (replacement capital) or “Secondary purchase” (secondary purchase) - the acquisition of shares of an operating company by another venture institution or another shareholder.

The selection stage is of particular importance in venture funds formed as strategic alliances, where private objectives may conflict with the objectives of the alliance as a whole, leading to oppurtunistic behavior.

The stage of venture investment and cohabitation is the longest for the entire existence of the fund. Based on the structure, the following types of investments are distinguished:

• 1. Start-up venture investments are the most risky form of investment, including:
  • A) Pre-start financing (seed).
  • B) Start-up financing.
• 2. Venture financing for the development of a company, as a rule, is divided into financing its initial and subsequent stages.
• A) 0 th early stage financing is designed to help small businesses with significant growth potential
• B) Later stage financing, which provides for the allocation of funds to enterprises with existing production that have great potential for expansion.
• 3. Financing of individual operations (expansion) is carried out as a one-time act. As a rule, funds are allocated for a very short period (for example, 2 years).

In addition to the listed forms, there are other types of venture investment, such as:

• A) Rescue financing (for the revival of a potentially bankrupt enterprise);
• B) Replacement financing (to replace part of the firm’s external resources with its own capital);
• C) Financing operations related to the company's entry into the securities market.

Based on the statistical data presented in Table 1 of the Appendix, the following conclusions can be drawn. The most common is investing in later stages of development.

This is due to lower investor risks (P. Gulkin), the likelihood of a more accurate assessment of the company’s potential, and the ability to avoid such complex operations as patenting and licensing (K. Campbell). In addition to diversity in assessments of the reasons for the predominance of investments in late stages of development, we can also track differences in the definition of the role of a venture capitalist in a creditor company. A number of economists believe that an investor, when purchasing a block of shares (usually 25% + 1 share), expects that the company’s management will use his money as financial leverage in order to ensure faster growth and development of their business. The investor does not take on any risks other than financial ones. Having a controlling stake, managers retain all the incentives to actively participate in business development. Other economists note the active role of venture capitalists in running a firm. Venture capitalists can significantly influence strategic decisions related to product development, help bring products to potential customers, and participate in negotiations for major sales or licensing agreements. They can also make a significant contribution to day-to-day issues such as developing options schemes, organizing seminars for portfolio companies, obtaining government grants or tax benefits. Even to raise a struggling company, an investor spends enormous effort, since a bad investment decision will greatly undermine the investor's reputation. We believe that the second point of view is the most objective, since venture capitalists, who relied entirely on the existing management team, left the industry after the “tech bubble”.

As noted above, the “output” is distinctive feature venture capitalist from a “strategic partner.” As a rule, the strategy for the future “exit” is thought out in advance and laid down in investment project(many firms are forced to refuse to pay dividends, reinvesting them in production, as this is determined by the contract between the venture entrepreneur and the creditor company). There are three most common exit strategies: issuing new shares (flotation), or initial public offering (IPO); an industry sale, where one portfolio company is acquired by another, usually a larger firm; sale of a share of shares to other shareholders or management of the enterprise.

Summarizing the consideration of the mechanism of venture investment, we should once again focus on its difference from “strategic partnership” and bank lending. Venture financing is characterized by the distribution of common risks between the venture investor and the entrepreneur, a long period of coexistence, which requires both parties to openly declare their goals at the very initial stage of the common work. Such differences were formed under the influence of the tasks and goals for which the venture business was born.

To consider the role of “risky” business, it is necessary to clarify the multifaceted nature of this phenomenon. First of all, it is necessary to emphasize that it is one of the universal levers of innovative development, and therefore of economic growth in general. The venture business, on the one hand, acts as a unique mechanism for the commercialization of R&D (research and development), which is explained by the combination in one company of well-developed management methods that make it possible to minimize the large associated financial risks and strong material incentives for the main entities innovation process (all this is provided by the venture entrepreneur himself). And the presence of a prototype or prototypes that have high commercial potential when translated into a serial commercial product (this is provided by the projects themselves, selected by the investor). It should be noted that venture entrepreneurship does not always cope with such a role. The “tech boom” of the turn of the century, which we will discuss below, attracted a lot of “incompetent”, absurdly, investments into this industry, which led to the subsequent decline. At the same time, the venture capitalist, if in place, shares his wisdom and vision for the future based on his wealth of experience and becomes a key element in the development of the company.

On the other hand, “risky” business stimulates R&D, which is associated with a short product life cycle (in the US microelectronics industry it averages 4-5 years). The rapid change in product range forces firms to move from one innovation to another.

So, as we have already noted, such a duality of the role of the venture business (commercialization of developments and their stimulation) determined the specific mechanism of its functioning, which is initially focused on the need to “exit” the company in case of success and to incur losses in case of failure. In addition, we consider it necessary to repeat that in this work, by the concept of “venture entrepreneurship”, we mean the activity of organizing mediation between a venture investor and investment recipient firms, aimed at sharing risks between all subjects of contractual relations and making a profit through “exit” .

Content

INTRODUCTION
CHAPTER I. GENERAL CHARACTERISTICS OF VENTURE ORGANIZATIONS
1.1. History of the emergence of venture organizations
1.2. Activities (legal personality) of venture organizations
CHAPTER II. RISKS IN THE ACTIVITIES OF VENTURE ORGANIZATIONS
2.1. Entrepreneurial risks of venture organizations
2.2. Risks leading to bankruptcy of venture capital organizations
2.3. Risky operations
CHAPTER III. Legislative regulation of venture organizations
3.1. State regulation of venture organizations
3.2. Rulemaking as a necessary element of the development of venture organizations
3.3. Improving legislation in the field of venture capital activities

CONCLUSION

BIBLIOGRAPHY

Introduction

The venture business, which originated in the mid-50s, has developed into a powerful global industry and has established itself as one of the most effective tools for supporting and developing the real sector of the economy. In the global economy, venture capital has had a huge impact on the development of such industries as semiconductor electronics, computer technology, information technology, and biotechnology.

Venture financing is not a very common phenomenon in our country, although venture funds and investment companies that are engaged in such financing exist in Russian market for a long time and are showing very successful results. Most of these venture funds are created using funds from the European Bank for Reconstruction and Development (EBRD). In connection with the advent of venture financing in 1997, the Russian Association of Direct and Venture Financing was even formed, which united 43 companies, to one degree or another, related to this business.

The main purpose of venture financing is to invest in the development of small and medium-sized enterprises and knowledge-intensive projects. Therefore, the task of developing this area was included in government programs.

The formation of any business, and especially medium and small enterprises, is very difficult, especially without sufficient funds for its development. Venture financiers can provide the necessary material resources.

Legal regulation social relations related to activities aimed at using scientific knowledge in order to obtain a new or improve a manufactured product or a method of its production, is of particular relevance in our country in connection with the ongoing reforms. Traditionally, scientific and technological policy in Russia has always been considered as the basis for the country’s economic growth, therefore a significant part of the legal framework and scientific research was devoted to the implementation of scientific and technological achievements and the acceleration of scientific and technological progress.

Legal regulation of relations in this area was carried out through numerous acts issued by ministries and departments. The lack of a clear legislative basis for the development of the country's scientific and technical potential gave rise to a selective nature of regulation and did not create a coherent regulatory and legal system that would be able to mediate the real patterns of the scientific and technological revolution, one of driving forces which innovations are.

Legal regulation of the venture business, which should ensure the effective functioning of the venture investment system in the scientific and technical sphere, is currently absent. Measures of state support for enterprises included in the mechanisms of venture activities are practically not implemented.

The purpose of this work is to try to systematize regulations, to one degree or another, regulating the activities of venture capital organizations in the Russian Federation.

CHAPTERI. GENERALCHARACTERISTICS OF VENTURE ORGANIZATIONS

1.1. History of troublesceremonies of venture organizations

The institutionalization of venture capital dates back to 1958, when the US Congress decided to launch the Small Business Investment Company (SBIC) program. Under this program, the US government, through SBIC, provided access to government funding to young growing companies, subject to the simultaneous attraction of funds from private investors in a ratio of 2:1 or 3:1, i.e. two or three parts of the capital had to come from private sources. SBIC was regulated by the Small Business Administration (SBA). Under the program, SBICs were private companies, but by committing to make limited types of investments, in exchange they received government subsidies by issuing SBA-guaranteed bonds. As SBIC developed, independent private venture capital funds and companies began to emerge in parallel, eventually becoming what are today known as venture capital sources. As of the end of September 2005, 336 SBIC companies had $10 billion under management. USA. In 1972, Congress expanded the SBIC program by creating Minority Enterprise Small Business Investment Companies (MESBIC), later renamed Specialized Small Business Investment Companies (SSBIC). There are currently 59 companies under the SSBIC program; The average capital under management is $1.7 million. USA.
In Europe, venture capital, as an alternative source of financing for private businesses, appeared only in the late 70s. Before the advent of venture capital in Europe, private entrepreneurs simply did not have easy access to sources of equity financing. Since the mid-1980s, European investors have become more interested in equity investment opportunities, investing less in their traditional fixed income assets.
In Russia, venture funds began to be created in 1994 on the initiative of the European Bank for Reconstruction and Development (EBRD). Regional Venture Funds (RVF), of which there are 10, were formed in 10 different regions of Russia. At the same time as the EBRD, another large financial structure, the International Finance Corporation, also decided to participate in the venture structures being created together with some world-famous corporate and private investors. In 1997, 12 venture funds operating in Russia formed the Russian Association of Venture Investment (RAVI) with headquarters in Moscow and a branch in St. Petersburg.
1. 2 . Activities of venture organizations

There is currently no legal definition of venture activity at the level of Russian law. The Federal Law “On Science and State Scientific and Technical Policy,” which was supposed to establish a legally significant concept of venture capital activity, in the adopted version, unfortunately, does not contain such a definition, although it was present in the bill.
In the absence of a legally established circle of persons participating in the venture process, additional difficulties arise in determining the figure who has the status of a subject of venture activity.
Both legal entities and individuals can participate in the venture process.
In order to become a participant in venture activities, there is no need to acquire the status of the same name, as, for example, the law requires an entrepreneur. This type of activity does not require licensing, at least at present. At the same time, the regulations governing the organization of venture capital activities in the Russian Federation and the very nature of innovations make it possible to outline the circle of entities not only directly involved in the venture process, but also ensuring this process.
Persons providing conditions for the activities of venture organizations should first of all include the bodies state power, which establish the general directions of innovative activity, approve innovative projects and programs, develop the basic principles for the development of innovative activity in the field of science and scientific services, approve forms of state reporting, establish and register organizations implementing innovative projects, etc.
The goals of creating the Innovation Council are to coordinate work and develop the main directions, the most effective development innovative activities of higher education in the field of science and scientific education. The Council performs the functions of an advisory body and its main task is to develop recommendations for the formation and implementation of innovation policy of higher education in Russia in the field of science and scientific services.
The entities taking direct (partial or full) participation in venture activities are very diverse.
CHAPTERII. RISKS IN THE ACTIVITIES OF VENTURE ORGANIZATIONS

2.1. Entrepreneurial risks of venture organizations

In civil legislation, “entrepreneurial risk” is a specific concept in relation to the category “risk”. The definition of “risk” is used in legislation and in scientific literature in relation to certain types of relationships and areas of professional activity. Within the objective category of risk, there are such types of risk as service, industrial, scientific and technical, creative, medical, sports, journalistic, insurance, commercial, etc.
Most often, the category “risk” is used in civil law. This category is used in the norms of the Civil Code of the Russian Federation 89 times, where risk is correlated with losses, accidental loss or damage to property, accidental impossibility of performance, attribution of costs and losses, consequences (adverse, failure to submit a claim, lack of information, death or damage, failure to fulfill obligations), loss (destruction), shortage or damage, non-receipt of expected income, liability, payments.
Based on the above, we can conclude that business risk is a complex category, including, among other things, civil liability without fault, other adverse consequences of technological, innovative, information, etc. character. Thus, according to clause 3 of Article 401 of the Civil Code of the Russian Federation, entrepreneurial risk should be understood as the incurrence of adverse consequences (property in the form of losses incurred during business, technological, innovative, information, etc.), as well as independent property innocent liability ( the only basis for exemption from liability is the presence of force majeure, unless otherwise provided by law or contract.
Risks associated with management entrepreneurial activity, are traditionally divided into two large groups:
1. Pure risks (arise under the influence of objective factors).
2. Speculative risks.
2.2. Risks leading to bankruptcy of venture capital organizations

The institution of bankruptcy is the most important element of the mechanism market economy. Its meaning is the voluntary or forced liquidation of insolvent legal entities when the implementation of measures to prevent bankruptcy, the implementation of pre-trial reorganization, or supervision, or external management does not ensure the required level of solvency of the enterprise (organization).
History of bankruptcy legislation in modern Russia began with the adoption of the Law of the Russian Federation “On the Insolvency (Bankruptcy) of Enterprises” (hereinafter referred to as the Bankruptcy Law of 1992). Taking into account more than seventy years of absence from legal practice, in particular, and in o, etc.................

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INTRODUCTION 3
1. VENTURE ENTREPRENEURSHIP AS A NEW FORM
INVESTMENTS 4
1. 1. History of the emergence of venture funds. 4
1. 2. The concept and essence of venture entrepreneurship 6
2. VENTURE ENTREPRENEURSHIP IN RUSSIA AND ITS
FEATURES 13
2.1. Creation of venture funds 13
2. 2. Forms of venture capital firms 15
3. PROBLEMS OF DEVELOPMENT OF THE VENTURE SECTOR
IN RUSSIAN SMALL ENTERPRISE 19
CONCLUSION 29
REFERENCES 30

INTRODUCTION
Venture entrepreneurship today is new form small business, the role of which at the present stage, in the era of new technologies, has increased significantly, so the relevance of the topic is obvious.
The name “venture entrepreneurship” comes from the English “venture” - a risky enterprise or undertaking. The very term “risky” implies that there is an element of adventurism in the relationship between the investor and the entrepreneur claiming to receive money from him.
Indeed, risk (venture) investment, as a rule, is carried out in small and medium-sized private or privatized enterprises without them providing any collateral or mortgage, unlike, for example, bank lending.
Venture financing is a special type of high risk, when direct investments are provided in exchange for a share of the company's shares, which is justified only by faith in the success of venture activities and the lack of conditions for own research and commercial implementation of promising technology, and compensation for the long wait of investors is possible only by selling them shares in the supported business.
The purpose of the work is to consider the economic concept of venture entrepreneurship; for this it is necessary to identify its essence, forms, features at the present stage, as well as its role in the development of the national economy.

1. VENTURE ENTREPRENEURSHIP AS A NEW FORM OF INVESTMENT
1. 1. History of the emergence of venture funds.
Venture (risk) capital is a phenomenon little understood by most Russians. At present, venture business is the most promising sector of business activity. It is all the more interesting to turn to the history of its development. “Venture” or “risk” capital is a phenomenon little understood by the vast majority of Russians. It is often confused with bank lending or charity.
The venture capital business originated in the USA. Like any extraordinary endeavor, the new business needed strong and energetic personalities and innovative approaches. It all started in Silicon Valley - the cradle of modern computer science and telecommunications. In 1957, Arthur Rock, then working for an investment banking firm on Wall Street, received a letter from Eugene Kleiner, an engineer at Shokley Semiconductor Laboratories in Palo Alto. The head of the company, William Shockley, had just won the Nobel Prize for inventing the transistor, but Eugene and several of his colleagues were not very happy with their boss. They were looking for a company that would be interested in the idea of ​​​​producing a new silicon transistor. Rock showed the letter to his partner and convinced him to fly to California together to study Eugene's proposal on the spot. After their meeting, it was decided that Rock would raise $1.5 million to finance Kleiner's project. Rock approached 35 corporate investors, but none of them decided to participate in financing the proposed deal, although all seemed interested in his proposal. Never before has it happened to create a special company under absolutely new idea, and even finance a theoretical project. It seemed that all possibilities had been exhausted and the idea was doomed. But then, by chance, like many things in this world, someone advised Rock to talk to Sherman Fairchild. Sherman was an inventor himself and had experience creating new technology companies. It was he who provided the necessary $1.5 million. This is how Fairchild Semiconductors was founded - the progenitor of all semiconductor companies in Silicon Valley. After that, Rock also had Intel and Apple Computer. By 1984, the name Arthur Rock had become synonymous with success. In fact, he was the first to use the term “venture capital” at all.
The first fund formed by Rock in 1961 had a size of only 5 million, of which only 3 were invested. Corporate investors were not interested in investing in financial structures that were then obscure. But the results of the fund’s work turned out to be stunning: Rock, having spent only three million, after a short time returned almost ninety to investors (i.e., brought investors almost thirty-fold (!) profit).
Since the mid-1980s, European investors have become more interested in equity investment opportunities, investing less in their traditional fixed income assets. The pioneer of the venture industry in Europe was and remains the UK - the oldest and most powerful global financial center.
In 1979, the total volume of venture capital investments in this country was only 20 million British pounds, and after 8 years, in 1987, this amount amounted to 6 billion pounds. Over the past decade, the venture business in Europe has accumulated 46 billion ECU long-term capital, and currently the number of private companies invested is about two hundred thousand. In 1996, more than 3,000 professional managers and investors worked in this investment business.
There were 500 venture funds and companies in 20 European countries. This year was a record year for Europe. The volume of investments reached 6.8 billion ECU.
The total amount of capital of new funds pouring into the venture business this year amounted to 7.9 billion ECU, which is almost twice the level of 1995. At the same time, 15% of all investments were made outside of Europe (versus 9% in 1995 g.), mainly in the so-called “new markets”, which includes Russia. According to the Price Waterhouse Venture Capital Survey, in the United States alone, 713 companies received $3.67 billion in venture capital in the fourth quarter of 1998, an 11% increase over the same period in 1997. In 1998, investment reached $14.27 billion, which is 24% more than in 1997 and 78% more than in 1996. Data for 1999 have not yet been published, but it is already clear that the amount of investment in new promising technologies will be a record in the entire history of the venture business.

1. 2. The concept and essence of venture entrepreneurship
Venture capital firms are temporary organizational structures created to solve the problems of a specific organization in need of capital.
These organizations are characterized by high activity, which is explained by the direct personal interest of the company’s employees and venture business partners in the successful commercial implementation of developed ideas, technologies, and inventions at minimal cost.
Venture firms are created on a contractual basis and with funds obtained by combining funds, usually from several legal or individuals(or both at the same time), or for investments and loans from large companies, banks, private funds and the state.
Characteristic feature investing in a venture business is an investment of financial resources without any guarantees or material support from venture firms. Venture capital firms, usually small in size, are engaged in developing scientific ideas and turning them into new technologies and products.
At the present stage, the role of small businesses in scientific research and development has increased significantly. This is due to the fact that the scientific and technological revolution has given small and medium-sized innovative and high-tech firms modern technology that matches their size, microprocessors, microcomputers, microcomputers, which allows them to carry out production and development at a high technical level and requires relatively affordable costs.
The initiators of such an enterprise are most often a small group of people - talented engineers, inventors, scientists, innovative managers who want to devote themselves to developing a promising idea and at the same time work without the restrictions that are inevitable in the laboratories of large companies, subordinated in their activities to strict programs and centralized plans. This method of organizing research makes it possible to maximize the potential of scientific personnel, who in this case are freed from the influence of bureaucracy. Risky enterprises are a unique form of protecting talent from losses at the starting stages of the innovation process, when the novelty of a scientific or technical idea interferes with its perception by the administrative leaders of the company. Advantages of a venture business: flexibility, agility, the ability to reorient yourself, change search directions, quickly grasp and test new ideas.
The desire for profit, market and competition pressure, a specific task, and strict deadlines force developers to act effectively and quickly, intensifying the research process. Large corporations themselves, having expensive equipment and stable positions in the market, are not very willing to undertake technological restructuring of production and various kinds of experiments. It is much more profitable for them to finance small innovative companies and, if the latter are successful, to move along the path they have trodden.
There are many definitions of what venture financing is, but they all, in one way or another, boil down to its functional task: to promote the growth of a specific business by providing a certain amount of cash in exchange for a share in the authorized capital or a certain block of shares.
The venture capitalist who heads the fund or company does not invest his own funds in the companies whose shares he acquires. A venture capitalist is an intermediary between syndicated (collective) investors and an entrepreneur. This is one of the most fundamental features of this type of investment. A venture investor, regardless of its organizational form, invests money in the purchase of shares of companies that have a good potential for growth in value - on average 30% on an average annual basis with an investment horizon of 3-5 years. At the same time, he does not want to buy a controlling stake, but wants to have the opportunity, in case of growth significantly less than expected, to sell not only his stake, but also a larger one (himself or in partnership with other owners) in order to get a better value when exiting the project.
A venture investor prefers not to interfere in operational management, but to be an active participant in strategic management, have full access to information about all aspects of the company’s work, and influence the formation of a management team.
Without requiring collateral to invest in a company, a venture investor takes a portion of the shares and becomes a direct participant in the business. On the one hand, the venture capitalist independently decides on the choice of a particular object for investment, participates in the work of the board of directors and in every possible way contributes to the growth and expansion of the business of this company. On the other hand, the final decision on investment is made by the investment committee representing the interests of investors. Ultimately, the profit received by a venture investor belongs only to the investors, and not to him personally. He has the right to count only on part of this profit.
The goal of such investors is to invest money now and get it back within 3-5 (sometimes a little more) years, but with a much higher return than banks get their loan. The average rate of annual return for the period a venture investor is in a project, which such investors usually focus on when choosing a company, is 30-35% per annum. Here, the schedule of actual money coming into the company and the schedule of the investor receiving money back are taken into account. As a rule, money is returned in two ways - through dividends on shares and through the sale of these shares at the time of exit from the project.
The last method is especially important for the investor. In many cases, dividends are not paid in a company while the investor is in it or are paid in small amounts. All money earned is reinvested in development and growth. The attractiveness of this investment for a venture investor is the income received from the sale of shares at the time of exit from the project.
That is why the issue of exit is given a lot of attention at the stage of structuring the transaction. A venture investor (whether it is a fund, or an investment company, or an individual investor) considers, together with the company receiving the funds where it is going to invest money, the prospects for growth in its value, the possibility of selling shares within a certain period of time (all, or owned only by the investor, or all the investor’s shares and part of the shares belonging to other owners). The sale can be to a third party without turning the company public or during an IPO, that is, turning the company public.
At the same time, the possibility of selling the company to other co-owners is not excluded, but such an exit is usually the least desirable for an investor. Indeed, in the first two cases, the market value of the package is automatically realized upon sale, and reaching an agreement on the repurchase of the investor's package upon its exit by other co-owners is the result of complex negotiations at the beginning of the transaction, when the investor wants to include the highest indicators in the calculation formula for the repurchase, and potential buyers - the lowest.
In the final choice of exit route from the project great importance has an assessment of the degree of risk in ensuring the growth of the company, both from the existing owners and from the potential investor. It is clear that if both parties hope for a rapid (several times) increase in the value of the company during the period of the investor’s planned presence in the project, then the investor will be more interested in “free hands” when exiting. In other words, he will not be very interested in committing himself to selling his share at a pre-agreed price, because the real market price is expected to be higher.
The existing owners of the company, on the other hand, will be more interested in a buyout arrangement at a pre-agreed price (or a formula for that price) in order to be able to receive a “premium” on the difference between the higher market price and the actual buyout price.
If the parties assess the risks of rapid growth in the value of the company as high, that is, speaking in simple language, they doubt that in 3-5 years the cost will be such that it will provide the investor with the desired IRR of 30-35%, then the company’s owners are less inclined to negotiate a buyout, and the investor, on the contrary, is not averse to ensuring at least some kind of profitability. In this case, the investor often insists that the structure of the transaction include a “put option” - a condition when after a certain amount of time (for example, 2-3 years) the investor would have the right to offer other co-owners to buy from him package at a certain price (sometimes fixed, sometimes calculated according to a formula), and the co-owners, in turn, will have to do this.
In a number of cases, the question is also raised about a “call option”, when the investor has the right, after a certain period of time, to demand that other co-owners sell him a certain number of shares. This may be necessary in order to form a larger package in order to get a higher price when selling to third parties, because with the same value of 100% of the company, the price of different size packages may differ in amounts.
As a rule, classic venture investors, when entering a company, do not seek to own a controlling stake; they prefer to be content with a minority stake, in most cases - from 15 to 49%. With the exception of a number of funds, venture investors generally assign responsibility for operational management to other co-owners, stipulating for themselves the right to take an active part in strategic management through membership in the board of directors, securing the right of veto on a number of issues within the competence of the general meeting of shareholders and the board of directors, and conducting detailed monitoring current economic activity up to the appointment of their representatives to the financial services of the company.
This approach means that the investor accepts the risks associated with the operational management of the company provided by other shareholders. That is why, in order to consciously perceive this risk, a potential investor spends a lot of time and effort during the preparatory stage of the transaction studying the company, that is, conducting the so-called “due diligence”, getting to know the management team, assessing their competence, and compliance with growth requirements.

2. VENTURE ENTREPRENEURSHIP IN RUSSIA AND ITS FEATURES
2.1. Creation of venture funds
A venture fund can be formed either as an independent company or exist as an unregistered entity as a limited partnership. In some countries, the term "fund" refers to an association of partners rather than a company as such.
Directors and management personnel of the fund can be hired either by the fund itself or by a separate management company or manager providing its services to the fund for an appropriate fee.
In the case of a limited partnership, the founders of the fund and investors are limited partners. The general partner in this case is responsible for managing the fund or monitoring the work of the manager.
The process of forming a venture fund is called “fundraising.” Specialization in the capital market required the emergence of professionals who specialized in managing money that did not belong to them. For investors to decide to invest in any venture fund, they would like to receive an answer to the following question: why it makes sense to invest in this particular fund. To provide them with detailed information, the founders of the funds at the initial stage issue a memorandum that describes in detail the goals and objectives of the fund, the specific conditions of its organization and preferences.
Search and selection of companies is the most important component of the investment process. As a rule, companies that have finished products and are at the very initial stage of their commercial implementation are financed. Such firms may not only not make a profit, but also require additional funding to complete research and development work.
General criterion assessment for all venture funds is the answer to the main question: is the company capable of rapid development?
Venture capitalists, by definition, are people willing to take risks: after all, investing is carried out without providing any collateral or collateral, unlike, for example, bank lending.
Once a company comes to the attention of a venture capitalist, a long and difficult process of learning about each other begins. All aspects of the company and business are considered. When the preparatory work is completed, the company receives investment. As a rule, part of the funds is contributed to the share capital of the company, and the other is provided in the form of an investment loan for a period of 3 to 7 years.
Then comes a new stage called “hands-on management” or “hands-on support”. A representative of a venture fund is a member of the company’s Board of Directors and takes part in the development of fateful decisions.
The final stage of the investment process is when the company goes public, in other words converting it from a closely held private firm to a publicly traded company (“exit”). The criterion for success is an increase in the value of the company several times within 5-7 years from the date of investment.
In Russia, venture funds began to be created in 1994 on the initiative of the European Bank for Reconstruction and Development (EBRD). Regional Venture Funds (RVF), the number of which is 10, were formed in 10 different regions of Russia. At the same time as the EBRD, another large financial structure, the International Finance Corporation, also decided to participate in the venture structures being created together with some world-famous corporate and private investors. In 1997, 12 venture funds operating in Russia formed the Russian Association of Venture Investment (RAVI) with headquarters in Moscow and a branch in St. Petersburg. According to the Financial Times, as of September 1997, there were 26 specialized funds operating in Russia investing in Russian corporate assets with a total capitalization of $1.6 billion. In addition, another 16 Eastern European funds invested part of their portfolios in Russia.

2. 2. Forms of venture capital firms
In Russia, there are two organizational forms of venture firms: independent venture firms and firms located within large enterprises.
Investors are entitled to a corresponding return on the financed firm's profits; funds are provided for a long term and on an irrevocable basis, so in some cases investors have to wait an average of 35 years to be convinced of the prospects of the investment; active participation of the investor in the management of the financed company, since he is personally interested in the success of the venture enterprise, therefore risky investors often do not limit themselves to providing funds, but provide various management advisory and other business services to the venture firm, but do not interfere in the operational management of its activities . The decision to create an internal venture is made by the management of the enterprise and its activities are controlled directly by one of the managers.
When selecting ideas on the basis of which a “risky” science-intensive project can be created, two points must be taken into account: firstly, the objectives of this project should not coincide with the traditional sphere of interests of the parent company, i.e. the goal of internal venture is to find new innovations. Secondly, when selecting ideas that will be implemented within internal ventures, experts must make sure that the commercial potential of innovations, the costs of creation, production and sales can be predicted with an accuracy of 50 to 75%.
Internal ventures, as a rule, are granted legal and budgetary independence, as well as the right to form the personnel of the enterprise. For greater independence, they are usually located in a separate building, but the parent company provides them with research, computing and other equipment, and provides the necessary management services. Typically, if successful, an internal venture turns into one of the production divisions of the parent company, and its products are sold through the sales channels established in the company.
Many companies organize several internal ventures simultaneously (an example is IBM Corporation, which in 1983 had 15 “risky” projects). Based on them, products such as telecommunications equipment, new types of displays and personal computers were developed and launched onto the market, the creation and release of which was the most successful project of IBM's internal ventures. A year after the start of the practical implementation of this project, the products were sent to the market, and two years later its sales volume amounted to $2.5 billion. By this time, internal venture had become the largest production division of the corporation. Venture entrepreneurship is most widespread in the United States. In terms of volume, the American risk capital market significantly exceeds Western European and Japanese ones. So, by the mid-80s. the cumulative amount of investment in Japanese venture capital firms was $2.6 billion, and in the United States it reached $24 billion.
The result of the ventures' activities were such products as cellophane, a ballpoint pen, a helicopter, a turbojet engine, a zipper, a picture tube, insulin, color photography and photo printing, xerography, a microprocessor and much more. In the USA, venture business is concentrated in the most knowledge-intensive industries in the production of semiconductors, computers, software, artificial intelligence.
In Western Europe, a significant venture capital market emerged in the 1970s. and began to develop rapidly in Holland, Germany, Italy and other countries. The organizational structure of a typical Western venture institution is as follows. It can be formed either as an independent company, or exist as an unregistered entity as a limited partnership (something like a “full” or “limited” partnership, using Russian legal terminology).
In some countries, the term "fund" refers to an association of partners rather than a company as such. The fund's directors and management staff may be employed by the fund itself or by a separate "management company" or manager that provides its services to the fund.
The management company is generally entitled to an annual compensation, typically up to 2.5% of the investors' initial commitment. Besides, Management Company or private individuals, employees of the management staff, as well as the general partner can count on the so-called “carried interest” - a percentage of the fund’s profits, usually reaching 20%. In the case of a limited partnership, the founders of the fund and investors are limited partners. The general partner in this case is responsible for managing the fund or monitoring the work of the manager. A limited partnership is tax-free. This means that it is not subject to taxation, and its participants must pay the same taxes that they would pay if their income or profits came directly from the companies in which they independently invested their funds.

3. PROBLEMS OF FORMATION
VENTURE SECTOR IN RUSSIAN SMALL ENTERPRISE
To form the venture sector of industry, it is necessary to create many economic prerequisites, but at least three of them are absolutely necessary. These are, firstly, the means of investment (venture capital), secondly, companies attractive for investment and, finally, the liquidity of investments.
Currently, there are 20 venture funds operating in Russia with approximately $2 billion under management. Approximately 25% of this amount has been invested, with $1.5 billion to be invested in the near future.
Outwardly, the situation looks quite satisfactory, but if we analyze it more deeply, it no longer seems so favorable. Over the past few years, not a single new venture fund has been formed in Russia; Moreover, all the organizational changes that management companies underwent did not lead to an increase in the capital under their management. If in countries with a developed venture industry about 50% of venture capital is of national origin (and in those Western countries where venture investment has recently begun to develop, national capital significantly prevails), then in Russia there is simply no national capital in the venture industry, which significantly slows down its development.
Thus, in Great Britain, national capital accounts for 55%, foreign capital - 45%, in Finland - 86.9 and 13.1%, respectively, in Russia - 0 and 100%. If we analyze who invests in venture funds in Europe and Russia, we will see that these are completely different investors.
There are actually two main investors in Russia - the EBRD (European Bank for Reconstruction and Development) and the US Government. In EU countries, more than 50% of investments in venture funds come from banks and pension funds; Next come insurance companies, large companies, individuals and government agencies.
In Russia, pension funds are legally allowed to invest only in real estate, bank deposits, shares of quota enterprises, state securities. Venture funds are not included in this list.
With many financial markets disappearing or shrinking, insurance companies and banks are experiencing Lately pressure of free funds, but they treat direct investments through venture funds with great caution, since venture investment in Russia has not yet become widely known and practically disseminated, and the mechanisms for its implementation have not been legally developed.
Thus, measures of state support for venture investment should be aimed at improving the legislative framework, which would allow a wide range of Russian investors to make direct investments and determine the mechanism for their implementation.
Another group of measures should stimulate (including through tax incentives) direct investment in industries in the development of which the Russian government is interested. The development of small and medium-sized enterprises plays a huge role in the development of the venture industry in any country. Venture capitalists in Russia advocate for stimulating small businesses not because they are strongly impressed by the work of the 2nd All-Russian Congress of Representatives of Small Businesses, but because this type of business is focused on achieving maximum results, is proactive, and has a sense of the market.
If the role of small business is understood correctly by the government and more or less tolerable living conditions are created for it, then the development potential of small companies is very great and in a relatively short time these companies can become large.
Venture capitalists advocate for the creation of favorable conditions for small businesses because this type of business can increase its turnover tens and hundreds of times, uses the achievements of scientific and technological progress much more effectively, and is aggressive in its export policy.
In addition, small companies spend about 6 times more relative to their turnover on improving their products and technologies (i.e., R&D) than large enterprises. Thus, for a venture investor, small and medium-sized enterprises are ideal investment targets, since the growth in the value of these companies, and therefore the earnings of investors, is adequate to the risk that the investor takes on.
On the other hand, the state receives a stable income from the successful development of small businesses. high level employment, stable tax revenues, equalization of living standards of different segments of the population. The latter is especially important for Russia, where income inequality in various social strata has already reached the levels of the least prosperous countries Latin America. In addition, the stable development of small businesses will attract the attention of foreign and Russian investors to this area, who already prefer direct investment in Russia over all others. In Russia, the level of development of small and medium-sized enterprises (SMEs) is significantly lower than in the USA, Japan and Europe.
The problem is that the average number of employees per enterprise is decreasing, and instead of dynamic development of enterprises, their stagnation is observed. Another possible explanation is that small businesses are moving into the shadow economy.
According to the Russian Independent Institute of Social and National Problems, in small businesses, real employment is higher than officially recorded, by 70%, real fund wages higher by 90%, turnover lower by 70%. Up to 50% of SMEs do not have state registration. According to the existing taxation system, small businesses do not pay 60% - 70% of the amounts they must pay to the budget.
What is the reason for this situation of small businesses, from which employment, budget, and the level of applied development and implementation suffer? Even those small benefits that are provided by the state to SMEs, many of them cannot take advantage of due to differences in the formal definitions of SMEs that exist in the EU countries and Russia. Even the principles underlying these definitions differ. In EU countries, to classify a company as small and medium-sized, it is necessary to satisfy 4 parameters: employment (usually up to 250 - 500 people); turnover up to 75 million euros; fixed assets do not exceed 40 million Euros; owned by a large enterprise (KE) no more than 33% of the capital of the SE.
In Russia there are only two such requirements: employment (maximum from 30 to 100 people, depending on the area of ​​activity, including part-time workers) and share capital structure (more than 25% of the total share capital should not belong to a large enterprise).
Existing restrictions on the number of employees in the definition of small enterprises force company managers to either complicate the structure of the enterprise, dividing it into several companies, or distort official reporting. Both of these are not conducive to obtaining investments. The second requirement leads to the fact that small enterprises, after receiving investment, cannot immediately be considered small.
Excessive bureaucratic pressure is felt by all Russian business. However, if Gazprom or Lukoil withstand it, then the small enterprise simply perishes under the pressure of organizations that, based on their internal instructions, can close any small enterprise. If an enterprise is inspected by one of the regulatory authorities every three years, then, taking into account the number of inspectors, this means that the company is inspected monthly. Frequent inspections do not so much improve the situation as they are an additional source of income for the bureaucracy at various levels and departments. Registering an enterprise is also a problem, especially if there is foreign investment in it. In EU countries this takes days, in Russia it takes months.
In this case, the registration period does not depend on Russian legislation, but only from the arbitrariness of officials (mainly locally). Taxation is a key issue in regulating the entrepreneurial activity of society by the state. At the end of the 20s, the Soviet government overcame the NEP very simply and almost alone economic methods- taxes were increased to 34% of income. Foreign experience shows that a tax amounting to 40% of a company’s income slows down business development. It is also common knowledge that tax rates of 50% or higher lead to a sharp reduction in tax revenues to the budget. Therefore, there are no tax rates exceeding 30% anywhere in the world. Our law-abiding entrepreneurs pay 60%.
Another aspect of negative government intervention in the affairs of companies is a number of provisions of the Decree of the Government of the Russian Federation on the composition of costs for the production and sale of products (works, services) and on the procedure for generating financial results taken into account for taxation. Three fundamental types of company costs, which ultimately lead to improved products and contribute to widespread implementation on the market: R&D, purchase of new equipment, costs of promoting the product to the market - cannot be attributed to the cost of production.
Venture capital investors predominantly invest in young, fast-growing small and medium-sized companies. Moreover, each investment is associated with obtaining permission from the Antimonopoly Committee, which is puzzling, since the acquisition of shares in a company, even with a turnover of 10-15 million US dollars, in no way limits competition in the industry and cannot create preconditions for the monopolization of any segment of the Russian economy.
On the other hand, the Ministry of Antimonopoly Policy and Entrepreneurship Support is blatantly negligent in its attitude to the most serious violations of equal conditions of competition - the basic rule of market development.
First of all, this is the failure to comply with the bankruptcy law - instead of closing inefficiently operating enterprises and providing assistance to young and efficient structures, large “Soviet” enterprises are constantly provided with assistance - hidden in the form of tax breaks and lower energy prices or explicit in the form of financial injections.
This leads to the fact that potentially efficient industries, which regularly replenish the budget and pay for everything at market prices, not only cannot develop, but sometimes die, because they are not able to compete with enterprises that do not pay taxes, have price benefits and much more resistant to bureaucratic pressure. The other side of this problem is government orders, access to which is actually closed to SMEs. Tenders for government contracts are conducted in bad faith: either information about them is not available, or the results of the tender are predetermined.
The lack of equal conditions of competition is another external obstacle to the development of the venture capital industry in Russia. Moreover, Russia could increase labor productivity by more than 3 times only by eliminating unequal conditions of competition.
So, the need to change the formal definition of a small enterprise in the Russian Federation is obvious. Government bodies should provide support not only and not so much to micro-companies, but to those enterprises that have demonstrated growth potential, can provide additional employment, implement R&D results and increase tax revenues to the budget.
State support measures must contain actions aimed at:
- limiting bureaucratic interference in the work of companies (including accounting policies);
- reduction of the tax burden;
- fiscal policy should be oriented
to stimulate and develop business;
- providing equal rights with large enterprises in the competition for government orders (including in the field of R&D);
- a fundamental limitation of government subsidies to enterprises that are unable to adapt to the requirements of market conditions.
What are the advantages of investing in Russia? Russia is a developed country with a large, educated population and significant scientific potential. It has everything it needs to become the largest market for technological products that meet international standards, as well as become a major developer of new technologies. Russia's population is 150 million people, of which more than half have completed secondary education. The illiteracy rate is one of the lowest in the world (less than, for example, in the USA). Many of the world-famous scientists, mathematicians, physicists and chemists are Russian by origin (Pavlov, Vernadsky, Kurchatov, Cherenkov, Landau, Sakharov, Ioffe, Lebedev, etc.) Russian literature, music and art have rich cultural traditions and are recognized throughout world. The territory of Russia is many times larger than the territory of Western Europe and contains enormous natural resources.
Russia has huge reserves of oil, coal, gas, minerals, metals and wood. It is the largest supplier of metallic minerals and ranks first in the world in terms of nickel reserves. According to experts, the volume of fuel reserves in Russia today is 25% of the world level.
Although purchasing power is limited today, a small but growing portion of the population is becoming richer, even by Western standards. Russia has become one of the largest importers of luxury Western car models. The capacity of the domestic market is currently quite significant and tends to expand as living standards improve. The Russian government is fully aware that the success of economic transformation largely depends on the country's ability to replace huge industrial monsters with small commercial enterprises.
In the former Soviet Union, technology, especially its military and space applications, received the greatest attention. It was in these industries that the majority of material and human resources were concentrated. Funding for research and development in the Soviet Union has historically accounted for up to 15% of global spending on similar purposes. 4 million people worked in Soviet research institutes, more than 80% of them in Russia.
Achievements Russian organizations in developing technical solutions for the West have been undoubted for decades. Lasers and artificial satellites- inventions Russian science were the first to find their commercial application in the West. In the field of aircraft construction, the advantages of Soviet helicopters, fighters, transport aircraft and missiles are very well known. In the field of space technology, the launch and automatic landing of the Buran spacecraft and the flight of the Lunokhod would have been impossible without the presence of highly developed and integrated technological solutions in a variety of fields of electronics and engineering. Russians are excellent computer specialists. Tetris, one of Nintendo's highest-grossing games, was written entirely in Russia. Russian technological resources, however, were not widely represented in civilian industries. For example, despite the fact that Soviet telemetry spacecraft was of very high quality, the existing civilian telecommunications systems were clearly backward.
The main reason for this significant gap was the command system of the economy, which considered most scientific achievements as secret information. The same system did not encourage, but on the contrary, often simply prohibited enterprises from freely competing in the market. In closed economic system there were virtually no imports and only limited exports of goods not related to weapons. Moreover, the civilian use of technology suffered greatly from a lack of funding, since the lion's share was allocated to military needs.
Today, the activities of research institutes are no longer closed, and the exchange of information within Russia and between Russian and Western scientific centers free At the same time, centralized funding for scientific research has practically stopped, as a result of which research institutes are forced to engage in commercial activities, promoting their developments to the market and entering into competition with each other.
The results of the work of these institutes and the services of leading specialists are now available for commercial use. The level of technical education of the Russian population is very high. The number of qualified engineers, for example, is 1.5 million, twice that of the United States. Thus, qualified personnel can be used at all levels of production, despite the fact that the wage level is very low (on average $100 per month).

CONCLUSION
Thus, venture entrepreneurship, subject to support from the outside, primarily from the state, has a great future.
Venture enterprises stimulate competition and push large firms to innovate. In addition, the development of venture entrepreneurship is an improvement in the operating conditions of small businesses in general, since it plays an important role in the nature and direction of economic development of the national economy: from what dynamic processes take place in economic development What kind of reproductive and structural changes are observed depends on the state and prospects of the country’s economic life.
Unfortunately, the regional funds of the European Bank for Reconstruction and Development and the Equity Funds for Small Businesses constantly face various problems in their work at both the federal and local levels.
The influx of investments is constrained by the existing legal framework and tax system, an underdeveloped financial system against the backdrop of excessive government regulation, general weakness of infrastructure, etc. Therefore, it is hardly possible to count on the stability of the national Russian venture capital structure. The vast majority of funds working in Russia and with Russia were created either directly by international organizations (Regional Venture Funds and Equity Funds for Small Enterprises of the European Bank for Reconstruction and Development), or national ones, within the framework of intergovernmental agreements. Private venture funds are still poorly represented on the Russian market.
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