With the methodological support of RVC in the Sverdlovsk region there was created Regional Venture Fund (SVF) whose goal is to develop the infrastructure of venture financing of small innovative enterprises in the region. The size of the fund amounts to 156 million rubles. The distinctive feature of the new structure from the venture capital funds previously operated in the region is the opportunity to invest in portfolio companies directly, without creating a CEIF.
In accordance with the updated concept, the fund selects, on a competitive basis, private venture capital investors specializing in investing in early stage companies and undertakes to co-invest in the selected projects. The maximum amount of funds that will be allocated by the Fund will be determined for each investor. The total SVF portfolio is planned to gather at least 8 portfolio companies. The priority for investment will be given to the projects corresponding to the main directions of social and economic development strategy of the Sverdlovsk Region until 2020, namely those in the field of engineering, new materials, chemical industry, electronics and instrumentation industries, as well as in the IT.
"When the Fund operated as a CEIF, little consideration was given to the interest of the Region in creation and development of start-ups. The Management Company was not ready to take on working with high-risk projects, explaining it by the interests of private investors. Thus, from more than 200 projects reviewed only two were financed. The resources of the Fund were transferred to one private investor for 6-7 years. With the new scheme we significantly expand the circle of private investors who can use the services of the Fund in co-investment of projects, thereby reducing the risks of those who are actually ready to invest in innovative enterprises at early stage of development" – explains the director of the fund Elena Tochilina.