Экономические науки/2. Финансы и банковское дело

Berdar Margaryta,

PhD (Economic), Associate Professor, Department of Enterpreneurship,

Taras Shevchenko National University of Kyiv

Venture business as a source of financing of innovative activity enterprises in Ukraine

The current level of development of the country depends on the level of innovation, because innovation is a key factor in the success of the enterprise, which affects the level of the whole country [9]. However, Ukraine continues to develop as a country in which a high proportion is occupied by commodity industries, and almost no conditions for effective implementation of innovation through various obstacles (financial, political, legal) that faces towards the implementation of innovative models of development in our country .The instrument of implementation of this model is the creation of an efficient national innovation system.

One of the key problems of Ukrainian innovative enterprises are financing innovation, namely the limited number of sources. Financing of small innovative enterprises has certain characteristics, which in turn determines the need to find alternative sources of funding. Analysis of available forms and sources of financing for small innovative entrepreneurship leads to the conclusion that the most accessible source (especially at the stage of origin) is the venture capital [10].The effectiveness of venture funding can be of great value for the financial support of innovation and investment projects and provide the basis for funding newly created enterprises in Ukraine.

A large number of publications and studies dedicated venture business, venture financing, venture investments, considering the risky investment assets as being vital element of innovation. This includes a number of works of foreign and domestic economists such as V.D. Bazylevych, A.A Dagayev, N.V. Kovtun, I.S Koziyenko V.V Lavruk, I.I. Mazur, N.T Rud, V.M Sheludko and others. For example, issues of development of venture investment, different aspects of venture enterprise researchers studied Bazylevych V.D, Mazur I.I, Sheludko V.M Kovtun N.V etc. [8].

The Venture business represents a form of expanded reproduction financial capital through dynamic update products and improve the technology base of production, development of new markets influenced by scientific and technological progress.

The Venture business originated in the US in 70 of the twentieth century, when there was a significant demand for investment among small businesses that have arisen as a result of the technological revolution in microelectronics. The first venture projects were related to engineering and instrument-making enterprises, namely the company «Spectra-Physics» led by venture capitalist Tom Perkins - development of a laser printer; Company «Fairchild Semiconductors», founder of Silicon Valley semiconductor companies led by venture capitalist Arthur Year - silicon transistor development; company "Cisco Systems", a world leader in the development of telecommunications equipment, led by Don Valentine, - development of network routers and improvement of telecommunication equipment [2].

There are many definitions of venture investment. The term «venture» translated from English means «risk», «risky undertaking», «risky business». In the V.K Myullers dictionary, it means «risky business», «speculation», «amount at risk».

The essence of the venture capital mechanism shown in venture financing. Venture financing involves mostly phased funding of venture capital firms.

There are different organizational forms of venture capital firms [7]: «independent» venture capital firms - mostly small, innovative firms using capital investment funds; firm implementation, organized on a mutual basis by industrial corporations, so-called external corporate venture funds; «internal» corporate venture units.

The sources of venture funding include: venture capital funds; banks; insurance companies; investment company; private investors; state structures [5, p. 227].

The Venture fund in Ukraine - a non-diversified collective investment of the closed type that performs exceptionally private placement securities of collective investment among businesses and individuals, is a venture fund [4].

Also in the Ukrainian legislation there is a ban for pension funds and insurance companies to invest venture capital funds, which reduces the potential framework for venture capital investments. The rapid development of venture capital funds in the US began just after pension funds were allowed to invest up to 10% of their assets in venture projects [9].

Venture funding is fundamentally different from any other, including the most widespread - banking, and has certain advantages:

- an innovative business venture from the outset implies the possibility of failure of the project to be invested;

- venture capital does not require annual payments on the percentage of liquid collateral;

- investor requires to insure their risks by helping businesses with advice, exchange of experience and business connections.

Without exaggeration we can say that this business venture:

- an important tool investment enterprises, the development of which is associated with a significant risk and the simultaneous possibility of obtaining large profits;

- one of the most realistic and affordable sources to finance small high-tech companies involved in the development and introduction of new advanced technologies;

- reliable and efficient alternative to debt financing that is focused not on existing and future assets of the company that develops;

- the possibility of a qualitative "jump" from the early development stages of a new non-profit high-tech company to profitable stages of its life cycle [3].

Unfortunately, the development venture funding in Ukraine can not be considered satisfactory.

Development of venture business in Ukraine hinder such negative factors: imperfect legislative base; lack of sources of financing investment; deterioration in the sector generate scientific knowledge; lack of venture capital in the market "quality" projects, defined marketing strategy and a strong potential market capacity; lack of specialists in the field of venture management, owning technology identification and assessment of innovative projects. [1].

Gaps in current legislation of Ukraine on introduction and development of venture capital is explained: the lack of a clear definition of the legal status of venture business enterprise; the lack of legislation regulating the relations connected with the use of scientific discovery (patent and copyright protection does not provide rights to basic scientific research results obtained for the first time); the absence of explicit statutory requirements for creating documents in non-banking financial institutions; the lack of regulations governing the possibility of using venture capital to finance innovation projects; lack of complete legal framework which is necessary for the local authorities of objective control and monitoring the efficiency of innovative enterprises, organizations and creative groups inventive activity.

So venture business - quite attractive view with the prospect of of obtaining considerable profits, but also must take into account the high degree of riskiness.

Venture business in Ukraine needs support from the state. In this matter the Ukrainian government can also benefit from the experience of foreign countries.

Literature:

1. Arhiyereyev S. Popadynets A. The role of state support of venture capital to increase production of high-tech and innovative products: www.niss.gov.ua

2. Dagayev A.A Mechanisms venture (risky) financing: international experience and prospects of development // Management in Russia and abroad. - 1998. - №1.

3. Dudchyk O. Features of venture business in Ukraine / O. Dudchykyu, Y.O Huleyko, K.V.Berezhna // Scientific Bulletin of Kherson State University. - 2014. - № 4 - P. 17-24.

4. The Law of Ukraine "On Joint Investment Institutions» № 5080-VI of 05.07.2012 p. [Electronic resource]: Access:

http://zakon4.rada.gov.ua/laws/show/5080-17/page

5. V.V Lavruk Venture Investment innovative activity. Lavruk // Proceedings of the National University of the State Tax Service of Ukraine. - 2012. -№ 1. - P. 224-234.

6. Nedbayeva V.M ,Kravchenko S.I Problems and prospects of financial support for innovative processes in Ukraine:

http://masters.donntu.edu.ua/2004/fem/nedbaeva/library/tezis.htm

7. Rud N.T Economics and organization innovation: teach. manual / NT Rud [electronic resource]. - Access: http://lib.lntu.info/books/fb/pesp/2012/12-40.

8. Securities / V.D.Bazylevych, V.M.Sheludko, N.V.Kovtun etc.: ed. V.D. Bazylevycha. - K: Knowledge, 2011. - 1094 p.

9. Venture Capital White Paper 2010 / EVCA electronic resource]. - Access: http: //iri.jrc.ec.europa.eu/concord-2010/presentations/fricke.pdf

10. The Global Venture Capital and Private Equity Country Attractiveness Index, 2011/2012 annual. - Mode of access: www.hkvca.com.hk/hkvcpea/files/mar10r01.pdf