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RUSSIA:
CHALLENGES AND OPPOTUNITIES
A SPECIAL ECONOMIC DEVELOPMENT INSTITUTE
STIMULATING
INNOVATIONS
Industrial
Special Economic Zones
Seaport
Special Economic Zones
Tourist
Special Economic Zones
Technology and
Development
Special Economic Zones
Technology Parks
INVESTING
INFRASTRUCTURE
Russian Development
Bank
Russian Investment Fund
Concession Agreements
Russian Venture Company
Regional Venture Funds
(over 20)
Russian Nanotech
Corporation
WWW.RUSVENTURE.RU
FIRST VENTURE FUNDS
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 use
INTERNATIONAL:
Relations with leading high tech clusters around the world for the benefit of
cooperation between startups, tech corporations, research universities,
venture funds and tech ecosystems
PROJECTS:
Other innovation-related projects, based on capacity and market need
WWW.RUSVENTURE.RU
INVESTMENT LEGISLATION REFORM
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
17
• 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
$11,686 B
~$1’066 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
GDP
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 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. ….
WWW.RUSVENTURE.RU
RUSSIA 2.0
CONTACT
OJSC “Russian venture company”
Office 42, 3-4 Kapranova lane,
Moscow, 123242,
Phone: +7 495 777 01 04
Fax: +7 495 777 01 06
E-mail: [email protected]
Web-site: www.rusventure.ru
WWW.RUSVENTURE.RU