Press about RVC

“We Must Transform Budget Money into Long Venture Capital.”

09.12.2019
Source: Kommersant. News Online

In an interview with Kommersant, Alexander Povalko, General Director of Russian Venture Company, talks about new tools for developing end-to-end technologies and competition in the global innovation market.

— One of the stated goals of supporting start-ups is to grow global companies, which should remain Russian at the same time. How could this happen?

— Companies leave, firstly, for the market, and this is the main motive, and secondly — for resources. Further on, the security of these resources, the rights of investors, etc. are superimposed. Accordingly, our problem and trouble are that we need to build such a jurisdiction (although this word does not cover all tasks) that would inspire confidence among the investor and the market. This requires the use of such regulatory regimes that provide priority and advantage to investors and technology companies.

— It was noted that technology companies lack measures to support exports.

— There are systemic measures, but there are individual solutions. Customized solutions for individual companies, those that are truly ready to compete in global markets, are always possible. We already have the opportunity to support them in a targeted manner, we are less able to integrate them into large logistics schemes — but we must learn this. Therefore, we agreed to work with large corporations that are already organically present in foreign markets. First of all, Rosatom acts as such a partner. We are “hooked” on their logistics schemes, on their contacts, helping our technology companies to export.

— Rosatom has an active international activity, but the rest of the state-owned corporations that develop end-to-end technologies are more focused on the Russian market.

— Not exactly. Almost all large corporations are somehow present in foreign markets. Although Rostec has specific products, it is actively sold. Rosatom has a great competitive product; they are leaders. Our goal is for other companies to have such a technological level.

— If a start-up is sold to a corporation, then for him, it will most likely be the final stage of development. How, then, to ensure the emergence of global players?

— It's not just about sales, although there is such a problem. When our corporations are actively buying up technology companies, from my point of view, they undermine the current and future capitalization of the market as a whole — although, of course, they solve their current problems.

— At the forum site, stress testing of the “roadmaps” prepared by state corporations took place. At the same time, cards for the end-to-end technologies have already been approved. How different are they?

— Now, much effort is spent on bringing all activity around end-to-end technologies into a single control loop. Maps of state corporations were written based on cards using end-to-end technologies that were developed as part of the national project Digital Economy. It is rather a readjustment and adjustment that describes purely technological solutions, the business part. Besides, resource support is significantly expanding.

— Does this apply to corporate financing?

— The maps of state corporations also consider other sources, not only those that were prescribed in the Digital Economy project. There it was primarily about budget funds and attracting co-financing. Now we are looking at the corporations that have assumed this honourable responsibility and at their ability to create associations, consortia, and attract resources from the market.

— Was stress testing carried out on specific projects?

— Priority was given to organizational and financial mechanisms. The main attention was paid to how competence centres would be created within corporations, which should find projects, finance research, — not just give out money in the format “financed, reported, shook hands and went on,” but built it into a consistent line of action for the achievement of ultimate goals. Projects are complex, large, and, unfortunately, they are not solved by separate teams of authors, individual companies or businessmen. They require a very high level of cooperation.

— What is the role of RVC here?

— So far, we are helping in the assembly, evaluation, and formation of these programs. Further on, the monitoring function will most likely be entrusted to us. As a development institution, we will support these projects financially and organizationally.

— You talked about a shift towards repayable financing, in general, more and more emphasis is placed on the development of venture capital instruments. What's new here?

— It is planned that next year the use of targeted budget funds for venture financing will begin. Now we are launching the first two funds — in the field of education and pharmaceuticals, which will transform budget money into long-term venture capital funds. It is about expanding the line of venture capital instruments for specific state programs. For example, the Pharma-2030 program. More and more resources appear on the market, which to some extent, compensates for the failure associated with the outflow of 2014–2017.

— RVC also uses budget funds.

— The allocation of funds to RVC's capital was a one-time decision adopted in 2006 to develop the venture capital market. The money that came to RVC stated, but not budgetary anymore, RVC in this regard acted as a commercial joint-stock company. But the money in question is targeted, it is included in the budget law with a fixed name.

— In these funds, all the money will be from the government?

— Differently. According to the Biomedical Fund, the volume of private investment in the fund and in the projects that it finances should be no less than those made by the government. There is no such restriction on the educational fund — but, of course, we will strive not to take all the risks.

— Will there be any changes in the reporting regarding the refund?

— Those amendments that are now made will remove restrictions on investments in the company's capital. Now it is impossible to buy a share in the company with budget money. The restriction on the issuance of convertible loans is also lifted — when you borrow and have the opportunity to turn it into stocks later. As for the reporting, it will, of course, be, but this is already a question of how correctly the goals were set, and the team was correctly formed.

— And if some projects are not successful?

— This is quite natural. We have set target returns for both funds, but this is a very humane indicator at the inflation rate, so we are ready to take risks and give managers free rein.

Interviewed by Tatyana Edovina.



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