Presentation on theme: "RUSSIA: CHALLENGES AND OPPOTUNITIES. WWW.RUSVENTURE.RU A SPECIAL ECONOMIC DEVELOPMENT INSTITUTE Russian Venture Company Regional Venture Funds (over 20)"— Presentation transcript:
WWW.RUSVENTURE.RU A SPECIAL ECONOMIC DEVELOPMENT INSTITUTE Russian Venture Company Regional Venture Funds (over 20) Russian Nanotech Corporation Russian Development Bank Russian Investment Fund Concession Agreements Industrial Special Economic Zones Seaport Special Economic Zones Tourist Special Economic Zones Technology and Development Special Economic Zones Technology Parks INVESTING STIMULATING INFRASTRUCTURE INNOVATIONS
WWW.RUSVENTURE.RU NEW MISSION, NEW FUNDING RVC capital is being doubled to RUB 30 billion USD 1.25 billion RVC mission is being expanded: Finance new segments of innovation companies Do hi-tech market development work
WWW.RUSVENTURE.RU INVESTMENT SCOPE EXPANDED Seed financing Range - RUB 1 to 10 million (USD 40K to 400K) Capital contribution, refundable (or convertible) only if and after startup is venture funded Later stage Several later stage funds may be created in 2008-2009 Will operate in between early stage funds and private equity funds (as 2nd and 3rd round investors) Will have a smaller share of RVC money and less generous buyback rights but less restrictive fund terms Co-financing of venture funded companies RVC can provide matching funds to deals with Russian startups led by an eligible VC (Russian or international) Same tech eligibility criteria will apply
WWW.RUSVENTURE.RU NEW HIGH-TECH MARKET DEVELOPMENT FUNCTIONS Russian Venture Company has been entitled by the Government to perform new market development functions as a organizer and finance provider TRAINING AND EDUCATION: Professional training for entrepreneurs and other key professions in innovation ecosystem MARKET KNOWLEDGE: Research of innovation-related markets and industries in Russia and worldwide, to be published for public useINTERNATIONAL: Relations with leading high tech clusters around the world for the benefit of cooperation between startups, tech corporations, research universities, venture funds and tech ecosystemsPROJECTS: Other innovation-related projects, based on capacity and market need
WWW.RUSVENTURE.RU INVESTMENT LEGISLATION REFORM 17 Examples US SEC Regulation D EU European Prospectus Directive Possible uses Venture funds Private equity funds Hedge funds Real estate funds Asset planning Status: State Duma 2nd reading: passed Nov 6, 2007 Becomes a law: E 1H 2008 Concept of a «qualified investor» –Asset size –Experience in securities markets Funds «for qualified investors» –Can be commitment based (money is contributed to fund on demand) –Right to keep reporting private –Right to create an investment committee with the power to approve and veto deals –Can charge increased fees –Other exceptions defined in fund charters
WWW.RUSVENTURE.RU INNOVATION ECONOMY LANDSCAPE USA 2006 RUSSIA 2006 RUSSIA 2015 GDP $13,194 B$930 B$2,820 B VC Deals volume $26.3 B = 0.195% ~$0.2 B = 0.00021% Untapped: $1.86 B ??? Potential: $5.64 B
WWW.RUSVENTURE.RU INNOVATION ECONOMY LANDSCAPE USA 2004 RUSSIA 2007 RUSSIA 2015 GDP $11,686 B~$1066 B$2,820 B R&D spending $312 B = 2.67% ~$11.7 B = 1.1% $78.9 B = 2.8% PE+VC Funds ~ $150 B = 48% ~ $2 B Untapped: $5.61 B RVC = $1.25 B ??? Potential: $37.8 B
WWW.RUSVENTURE.RU SERVICE INFRASTRUCTURE POTENTIAL USA 2007 RUSSIA 2007 RUSSIA 2015 Books: «Venture…» keyword 229,332 Amazon.co m 18 (!) Ozone.ru ??? Consulting market volume 1.07% GDP 0.16% (!) GDP ?? Potential: $28B Bank sector assets 280% GDP 52% (!) GDP ? Potential: $3,000 B
WWW.RUSVENTURE.RU EMERGING VENTURE CAPITAL BOOM Europe, May, 25, 2007, 12:39PM EST Russia's Venture Capital Boom Tech startups in the Federation are coming of age and starting to attract serious VC funding from the U.S. and Europe Tech startups in the Federation are coming of age and starting to attract serious VC funding from the U.S. and Europe by Jennifer L. Schenker …To encourage such investments, the Russian government has set up a trust that matches investments from private venture capitalists. Already, it has agreed to dispense nearly $100 million to three groups of investors. Among them: Asset Management, run by legendary Silicon Valley venture capitalist Franklin "Pitch" Johnson, which has secured $52 million in matching funds from the Russia government for a new investment vehicle called Bio-Process Capital Partners. The Russia-based fund will scope out investment opportunities in biotech. …. …To be sure, Russia still lags far behind other global destinations for venture capital. Since 1999, foreign venture capitalists have invested only about $300 million in total in the country's tech companies, says Yuri Ammosov, the adviser to Russia's minister of economics, who is overseeing the government's new investment fund. That's less than venture capitalists invested in China in the first quarter of this year alone, according to figures from Ernst & Young. ….
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