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Venture Funds: if you cant makeem, buyem Russian Venture Company: Russian Government fund of venture

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Russian Venture Company. Why cap on returns? ... Our goal is not to make money but to create Russian hi-tech sector. WE GIVE FUND ... – PowerPoint PPT presentation

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Title: Venture Funds: if you cant makeem, buyem Russian Venture Company: Russian Government fund of venture


1
Venture Funds if you cant makeem, buyem
Russian Venture Company Russian Government
fund of venture funds
  • March 9, 2007
  • Yuri Ammosov
  • Ministry of Economic Development and Trade
  • Russian Federation

2
Russian Venture Company Is state involvement
needed?
?
Why there is a shortage of Russian venture
capital?
Reason Free market failure
Objectively Hi-tech investments - High yield High
risk
Subjectively Investors think hi-tech yield lags
behind hi-tech risks
Policy involvement purpose Shift risk-return
ratio
3
Russian Venture Company What kind of involvement
needed
?
State VC fund
State fund of VC funds
Investment decisions
State
Private managers
Country
Korea, Finland, Germany
US (SBIC 1958) Israel (Yozma 1993)
Problems
Corruption Stupid decisions
Tiered decisions
Result
Inefficient
Usually efficient
Conclusion Make a fund of venture funds
4
Russian Venture CompanyHow it invests in high
tech startups
?
Fund of funds level
Russian Venture company
RUB 15 billion ( 565 million)
Venture funds level
Privately managed venture funds
From RUB 1.2 billion (45 million) To RUB 3.0
billion (115 million)
Startup level
Nanotechnologies
Biotechnologies
Telecommunications
Microelectronics
Alternativeenergy
Medicaltechnologies
Information technologies
?
?
?
?
Å
5
Russian Venture Company Basic structure
?
Venture Specialists ? ? ?
JSC Russian Venture Company
RUB 0.6-1.5 billion
49
manage
10 or more venture funds
Private VC fund investors
51
Fund Management companies
RUB 0.6-1.5 billion
manage
Venture funds (closed-end mutual funds)
Carried interest (20 max) Management fee (2,5
max)
Return on investment (80)
Investments
Early stage innovative startups
6
Russian Venture Company Board of Directors
?
Government Directors
Independent Directors
Herman Gref Minister of Economic Development
and Trade, Russia Chairman of the Board
Esko Aho President, SITRA National Innovation
Fund Finland
Dmitry Livanov Vice Minister of Education and
Science, Russia
Yigal Erlich Former Chairman, YOZMA Fund of
Venture Funds Israel
Igor Artemiev Chairman of Anti-Trust Committee,
Russia
Konstantin Remchukov Editor-in-Chief, Independent
Newspaper Russia
Alexei Korobov CEO, Russian Venture Company
7
Russian Venture Company Terms of the First
Venture Funds
?
Our first competitive selection starts NOW !
Selection Schedule
Terms of the Venture Funds
8
Russian Venture CompanyWhy cap on returns?
?
Government will cap its return from VC funds at
5 per annum!
Extra IRR For 5, 7 and 10 years of fund life
  • RVC funds will be refundable at 5 or CPI
    inflation rate, whichever is less!
  • If a fund is successful, limited partners buy out
    the government's share in the fund at a negative
    or zero real interest rate to the government
  • This way the government will take out some of
    investment risk
  • Our goal is not to make money but to create
    Russian hi-tech sector
  • WE GIVE FUND
  • YOU GROW STARTUPS
  • YOU KEEP NEARLY ALL NET INCOME

RVC share 49, IRR to RVC 5 Management fee and
carried interest are not factored in
9
Russian Venture Company The Message
  • For investors and venture capitalists
  • Hire the best teams
  • Seek most promising startups
  • Come and apply
  • We want to work with you
  • For mass media
  • Tell everyone who dreams of building a new Google
    ??? Intel, but does not dare
  • Start founding startups now unless you want to
    be late for money. It's time. Money for new
    success stories is on the way.

See HTTP//WWW.RUSVENTURE.RU for more info
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