Економічні
науки / 2. Зовнішньоекономічна діяльність
Lecturer, Nazarenko K.
Alfred Nobel University Dnepropetrovsk, Ukraine
VENTURE FINANCING IN UKRAINE AS ALTERNATIVE SOURCE OF INVESTMENT
INNOVATION ACTIVITIES OF ENTERPRISES
The innovative process becomes an institutionally
formed integrated network process, which gradually introduces an integrated
approach, based on the need for an innovative partnership of public and private
sectors, science and industry, in recognition of the effectiveness of alternative
sources of funding. To improve financial support innovative processes Ukraine
needs new alternative sources of investment resources. In developed countries,
one of the main supports of small and medium innovation business and funding
research is venture capital.
Venture financing radically differs from the bank
financing, and has certain advantages: it does not require annual payments of
percents, liquid collateral and the investor does not need to insure their
risks, and meanwhile actively helps to
the new firm by means of advices, experience and business connections.
Lack of funding greatly hampers innovation activities
of small and medium business in Ukraine. According to research carried out by
the State Statistics Committee of Ukraine, with almost ten thousand
respondents, 85% of managers responded that they do not carry out innovative
processes in the enterprise due to lack of appropriate financial opportunities,
as well as other known causes, such as high financial costs - 40.3%, high
interest rates - 38.7%, lack of customer funds - 39.8%. Comparative analysis of
the purposes of venture capital investments in the total European private
equity has shown that investing in early stage of 7.4% against 5.7% in the U.S.
in rebuilding phase - 35% versus 8.6% in late stage - 8% against 4.4% [1].
Thus, today's European businesses venture even more than the U.S., focusing on
the real support and development of small and medium enterprises, especially in
the rebuilding phase.
The concept of venture capital fund in Ukraine differs from generally
accepted: firstly, a specific institute of common investment (ICI) - namely,
non-diversified closed-end mutual funds, which carries exclusively private
placement of securities of its own issue and the assets of which more than 50%
consist of corporate rights and securities not traded on a stock exchange or
trading and informational systems. The main areas of venture capital investment
in Ukraine is building, trade, hotel and tourism industry, treatment of
agricultural production, insurance, information. A very significant is a
tendency to middle risks investment projects which use operations with
financial assets and fixed properties. While the focus on innovative projects
are not peculiar to the venture capital.
Experts and specialists on innovation and investment
activity problems named a broad range of organizational, economic and legal
problems of venture capital innovation activity in Ukraine. Results of these studies can
highlight the main factors hindering the development of venture investment in
Ukraine:
imperfect institutional support for venture capital;
inadequate legal
framework for the development of innovation activity based on venture
financing;
insufficient
development of methods and mechanisms for risk management and venture
capital and venture investor
protection;
insufficient
development of stock market, difficulties in determining the market value of
the shares of innovative enterprises;
inadequate sources
of formation venture funds, in particular as regards the ban on investing in
venture funds to insurance companies, pension funds, and insufficient
participation of banks in investing in venture funds;
complication of the
legal regime of intellectual property commercialization, in particular established
due to the state budget;
imperfection
of the Institute protect intellectual property rights;
poor
information security for the protection of intellectual property at all stages
of the innovation process;
shortage
of qualified professionals - venture capital managers and qualified consulting
projects in this area.
Considering that Ukraine is moving to the investment model of
development, the meaning of regulation of investment process in Ukraine is
growing nowadays. That’s why it is necessary to research and learn the
effective implementation of innovation and venture capital activities in such
countries as USA, Japan, Russia and Western Europe. The venture capital as it
is operates in the most developed countries of the world, but in Ukraine
legally and theoretically is not defined and not properly formed.
The special attention should be payed to institutional support and
regulatory - legal regulation of venture funding that would have stimulated the
direction of venture capital in support of promising innovative projects,
stimulates involvement in financing venture capital of Ukrainian banks allowed
to invest in venture funds institutional structures - pension funds and
insurance companies contributed to the venture investor protection.
Another promising direction should be the creation of venture funds in
the public - private partnership.
References:
1. Prysyazhnyuk V.Y. Features of the development of venture capital in
Ukraine / V.Y. Prysyazhnyuk / Economy and State - 2007 - № 5 - Art. 20-21.