Speaking at the Online Conference “Pandemic 2020: Opportunities and Barriers for the Innovation Sector” on April 13, Director of RVC subsidiaries Mikhail Fedotov urged all participants of the venture industry not to wait for large-scale and long-term financial assistance, but to quickly adapt their forecasts and strategies to the existing negative realities.
Regarding the prospects for supporting the technology business, Fedotov, first of all, asked not to forget about the factor of limited financial resources. In his opinion, not all funds will have an opportunity for additional financing of projects. It is highly likely that their investors (LP) will not be ready for such steps.
According to him, and the founders, and the funds need to revise their forecasts and strategies based on the adverse scenario and focus on own resources, actively developing partnerships. The Director of RVC subsidiaries noted that Infrafund already performs the role of an operational partner for a number of its portfolio companies, providing substantial support in managerial expertise, market relations, and opportunities to raise capital.
Speaking about support measures, the expert noted that these steps should not be short-term in nature, but must be at least a year long.
Also, according to Mikhail Fedotov, it is essential to take into account that the assessment of projects by investors will become stricter, therefore, in the conditions of definitely negative impact of the crisis on all participants of the investment chain, investors and entrepreneurs need to learn how to “be in the same boat” and negotiate. Speaking about the opportunities for obtaining investment and development, Fedotov noted that companies with good export potential and prospects for international expansion will receive priority. In his opinion, it is reckless to exclusively focus on a specific market and not diversify its activities now.
The expert also said that the current conditions have an additional negative impact on the possibilities for venture investors to exit the funded projects. According to him, earlier, it was not easy for Russian start-ups to find a buyer. Now the funds will be in invested assets longer.
Online Conference “Pandemic 2020: Opportunities and Barriers for the Innovation Sector” was organized and implemented by the Roscongress Foundation. The event was attended by representatives of leading development institutions, venture capital funds, and innovative start-ups.