Business angels spread their wings
The Russian business angel investment market has grown more than 4 times in 2013
Recently, the growth of the market is noticeable to the naked eye: Thus, according to open sources, the total amount of investments in early-stage projects with the participation of Russian business angels in the first 11 months of 2013 amounted to $ 116.5 million. This is almost 4.5 times more than in 2012. "According to the results of the study, during 2013 the importance of business angels in the venture ecosystem has increased markedly. An important role in this process was played by the actions of development institutions and associations of business angels to reduce entry barriers and increase information transparency of the market. However, the level of self-organization is still low and there is a great potential for growth. To date, the key issue of the emergence and development of various groups and associations of business angels is the issue of finding the optimal model for their financing. Here it makes sense to focus on the best foreign practices, adjusted for the peculiarities of the Russian venture market," said Konstantin Fokin, President of the National Association of Business Angels, General Director of the Center for Innovative Development of Moscow.
Gulnara Bikkulova, Director of the Innovation Markets Department of JSC RVC, drew attention to the fact that the main problems of the venture market today are associated with the lack of seed investors, as well as with late stages, that is, withdrawal from the project. In fact, there are two exit options – this is an IPO, that is, the sale of an investor's share through an exchange, or the sale of a project to a corporation. The innovation and investment market of the Moscow Stock Exchange began operating in 2009, and the first IPO took place in 2010. According to world statistics, the main way out is selling to corporations, this is how 90% of investors work. In Russia, this does not happen – corporations are inactive, so the task of RVC as a development institution now is to solve these two tasks: financing the seed stage and the development of the final stage. "This is what will allow the entire venture investment system to work effectively, allowing business angels to solve their task of forming a pipeline for investors of subsequent stages," Bikkulova stressed. "As a foundation of foundations, at the same time we create and demonstrate best practices," she added. "We have two main tools for this. First, venture partnerships in the seed fund: these are regional business angels to whom the RVC Seed Investment Fund gives financial leverage. Secondly, a pilot project implemented by RVC FPI together with the Moscow Seed Fund: a co-investment program with business angels. Within the framework of this project, 20 business angels have already passed a competitive selection and are working with the foundation."
In order to analyze the dynamics of business angel activity and build an effective strategy to support the sector from state development institutions, in November 2013, NABA and AtomPartners, with the support of JSC RVC, conducted a study of business angel investments in 2013. At a press conference, the results were presented by the managing partner of the Partners, Ivan Protopopov. According to him, 96 projects were financed with the participation of private investors in 11 months of 2013, of which 4 were worth $ 10 million or more. The number of projects increased by 174% compared to last year.As for the industry structure of private venture investments, it has not changed significantly since 2012. As in the previous year, most of the funds ($77.1 million, or 66%) were invested in projects related to ICT technologies. Finance and business services, retail and supply, and the creative industry were also popular. However, even the total investments in all these industries are still much less than in ICT – $ 34 million. You can read the study here.
In 2013, NABA and RVC implemented a number of projects aimed at developing and supporting the Russian business angel market. Special attention should be paid to the license program for preparing entrepreneurs and business angels to conclude venture investment deals at an early stage - ReadyforEquity. The invited expert of the program, business angel and managing partner of FutureLabs Alexander Borodich told about it. The successful outcome of the program was the adoption by a group of business angels - listeners of the business angel track – of the decision to conclude the first syndicated deal, the creation of a closed club of business angels, as well as attracting investments in the projects of listeners of the entrepreneurial track "MobilTek" and PopUpSter. "Training business angels and entrepreneurs in structuring transactions is an important and timely initiative. FutureLabs reviews a large flow of projects on a daily basis, and also works to attract co-investors to almost every one of its transactions. Understanding the benefits of co–investment and the growth of competencies among the listeners of such programs will not only lead to an increase in the number of syndicated transactions, but also increase the number of successful exits in the future," the expert noted.
At the end of the event, Alexey Kachai, Director of the Department of Regulatory Support for Innovative Development and Implementation of special projects of the RUSNANO Infrastructure and Educational Programs Fund, spoke about legislative initiatives aimed at supporting private investors. The main initiative, according to the market, is the implementation of a draft law providing for the provision of a tax deduction for the amount of qualified investments to business angels. "The adoption of the law will contribute to the growth of the number of early–stage companies, which over time should lead to the growth of this sector of the economy, increase employment, increase staff mobility, and increase revenues to budgets of all levels for payments from high-tech companies supported by venture investors at the early stages of their development," Alexey Kachai said. The draft law was developed on the initiative of the NABA with the support of RUSNANO, RVC and the Institute of Economic Policy. Gaidar. In October-November 2013, a draft law on amendments to the Tax Code of the Russian Federation in connection with the provision of a tax deduction to individual venture investors (business angels) was sent for consideration to the Ministry of Economic Development of the Russian Federation and the Government of Moscow.
Portal "Eternal youth" http://vechnayamolodost.ru26.12.2013