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12Предпосылки для инвестирования в стартапы
Кавалерчик Мария Николаевна
ассистент, Санкт-Петербургский тет, maria_kavalerchik@mail.ru
государственный универси-
В статье представлен качественный анализ тенденций российского рынка стартапов, основанный на оценке участников рынка иностранных инвестиций. Сравниваются позиции и подходы к выбору инвесторов, что позволяет определить ключевые особенности и выявить трудности, связанные с инвестированием в российские стартапы. Инвестиции в быстрорастущую российскую бизнес-среду рассматриваются с точки зрения плюсов и минусов. Авторы предлагают объединить значительное количество стартапов по отраслям или территориям в единую компанию с правовой формой открытого акционерного общества. Авторы предлагают комплексный подход к решению существующих проблем, который направлен на то, чтобы помочь инновационным стартапам успешно функционировать, а также на достижение более широкой цели укрепления инновационной модели как средства обеспечения конкурентоспособного, устойчивого и безопасного экономического развития в России.
Подчеркивается, что в разных секторах экономики есть стартапы, которые не требуют тестирования на Западе, поскольку многие инновационные бизнес-модели подходят только для России, удовлетворяя определенные требования отечественного потребителя.
Цель исследования - выявить основные причины успеха стартапов, изучить специфику процесса принятия решений о предоставлении государственной поддержки, а также оценить существующие риски, которым подвергаются частные инвесторы при инвестировании в российские компании. Ключевые слова: стартапы, венчурные инвестиции, венчурное финансирование, венчурный капитал, корпоративные венчурные фонды, краудфандинг, инновации.
Introduction
A startup may be an organization that creates a new product or service in a highly uncertain environment. In the event of failure, many start-up companies and depositors can often expect partial and total loss of investment.
Recently, the interest of foreign investors in investing in Russian startups has been growing, which was the reason for this research. Innovative modernization of the Russian economy offers an updated perspective on the development of startup companies as significant elements of the national investment system. There is an increase in venture capital investment in high-tech startups in Russia. The market of investments, both direct and venture investments, in this case can be characterized by such indicators as the number of funds, the amount of capital attracted by these funds, the number and total amount of investments made. [1]
Russia is on the list of leading countries along with Great Britain, France, Germany and Sweden in terms of the level of investment in high technology.
Launching startup projects and attracting innovations
The development of startup business in the domestic economy in the current conditions is hindered by a number of interrelated problems of a methodological, institutional, organizational-informational, marketing and investment nature. The current methodological problem is the lack of a unified approach to defining the main characteristics of startups. In different countries, startups include companies with different age and number of employees, taking into account the volume of own and attracted funds, as well as the size of income received. A common unifying idea is that startups are innovative in their operations and that they increase sales and profits multiple times in a short period of time since the launch of the project.
In general, this applies to the system of long-term goals of investment activities. The company should be distinguished by the presence of an innovative business model at its core, and also include innovations in the technologies used. Examples are crowd-funding platforms which allow company founders to gather like-minded people who have invested in an innovative project and are able to benefit from it. Company founders can obtain the capital for development that will allow them to place pre-orders and investors to get goods more cheaply. On this site we see at least one innovation in the business model (we rely on the most accessible audience for PR). This allows us to "move" this audience at a lower cost to our site. And in this way the site receives income from the collected funds, and the cost of attracting each user is reduced. The user can also support a completely opposite project, such as an invention or even operational support. To a site it brings certain profit. The basis of innovation in the business model is the use of big data, each company has its own algorithms for attracting investors and automation of the process of creating a crowd-funding campaign which allows to save labor expenses for preparation of a campaign considerably. The vision of
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investment goals and objectives, action planning and tactical activity of the company are important in order for each founder of the company to develop a specific strategy [2].
There are 5 stages of the startup project development:
1) Creating an idea. At this stage there is a search for ideas, an extensive market analysis, creation of a business plan and development of technical tools to translate an idea into a real product.
2) Launch. At the launch stage, the product must prove its advantage in the market and find its consumer by bypassing a large number of available equivalents. Creators need to be very persistent and demonstrate business acumen.
3) Development. At a certain level of development, the startup covers the market niche that the developers have focused on. There is a process of product approval in the market and reaching the break-even point.
4) The expansion stage. At this stage, the product becomes recognizable and is in demand among consumers. The goals set by the team are achieved. The company does not stop at the results achieved and continues to promote the fruit of its idea, moving to wider markets.
5) Exit is the final stage when an innovative company reaches the peak of its development and transfers its product to larger business players.
Each of the above points has its own methods and tools with which the goals are realized at each stage. [3]
Among organizational problems, it is particularly important to bring startup projects to the investment stage, which largely determines the success of its implementation. Another important factor is effective marketing of implemented startup projects using innovative technologies of their Internet promotion, opportunities for attracting investments (public-private - through development institutions, private - from business angels, venture funds, collective investments based on crowdfunding), provided by specialized Internet sites, as well as crowdfunding sites with the creation of communities of such sites in social networks.
A comprehensive solution to these problems will facilitate the successful functioning of innovative startups and the achievement of the strategic goal of implementing an innovative model to ensure competitive, sustainable and safe development of the Russian economy.
There are certain terms for the analysis of the company's technological, innovative and investment tools, and the development of a unified system of characteristics by which companies could be classified as startups is an urgent theoretical and practical task.
There are also questions related to the problem of institutional definition of the status of a startup company and its fixation in Russian economic legislation.
Among organizational problems, special importance is attached to bringing startup projects to the investment stage, which determines the success of its implementation.
The success factor is the effective marketing of implemented startup projects using innovative technologies. Among other things, we consider Internet promotion of startup projects and opportunities for attracting investment (both public and private, through crowdfunding development institutions). Such promotion is provided by specialized Internet sites, including crowdfunding sites with the creation of communities of similar sites on social networks. [4]
Attraction of stock market resources by an innovative project at the start-up stage is almost impossible due to the small amount of capital involved of such a project.
Therefore, it is proposed that a significant number of startups (e.g. those belonging to one industry, one region, etc.) be merged into a single company with a legal form of an open joint-stock company. According to the proposed mechanism, each initiator of a startup will contribute to the charter capital of a given company the relevant intangible assets (in the form of innovative ideas, patents, programs, etc.) and in some cases certain tangible assets, such as innovative equipment.
The availability of necessary competences, communications and administrative resources, which are directly used in the company's business sphere, is checked. Russian startups are involved in crowdfunding, where investors are financial groups that strengthen startups' positions on the market thanks to their client bases, long and cheap money, and partners who are able to create joint cases. With a comprehensive approach to solving existing problems, it is possible to achieve the successful functioning of innovative startups and thus achieve the strategic goals of ensuring competitive, sustainable and safe economic development of Russia.
Innovative modernization of the Russian economy actualizes the development of the national innovation system, a significant element of which becomes a significant innovation-generating enterprises, including innovative startups.
Startups are becoming an important factor in the economic development of world economic leaders, including the United States, Canada, Germany and others. The term "Startup", first used in Forbes magazine in 1976, became widespread in the 1990s due to the rapid development of Internet technologies.
According to Oxford Dictionary [5], a startup is a company with a short history of operations. The first startup is Hewlett-Packard, founded in 1939.
In Russia, companies that fit the definition of a startup began to appear in the 1990s, a natural response to the challenges of the fast-growing markets that emerged after the collapse of the USSR. [6]
One of the key indicators of the level of development of the national innovation system is the state of the venture investment market. The volume and structure of venture capital and its availability to innovators ultimately determine the innovative activity of economic entities, the commercialization of innovations and competitiveness in the high-tech market. Despite the dynamic development of the venture capital market in Russia (4th place in Europe), its share in the global venture capital market is about 0.7%. For comparison, the US share is 54% in China - 24%. [6]
High-tech industries: Innovative software, nanotechnology, technology and biomedicine offer new opportunities for successful business.
The new generation of Russian entrepreneurs is becoming similar to businessmen from America, Europe and Asia in many ways. Contemporary Russian entrepreneurs and engineers, who are open to all kinds of innovations, are erasing the stereotypes of Russian scientists who are not connected with market realities and work in Soviet-style research centers. [7]
Dozens of structures such as technoparks, incubators and accelerators that have emerged in the past few years are concentrated in Moscow. Foreign investors are being attracted, supplier search issues are being resolved and joint investment opportunities are being found. Tax cuts lead to large subsidies for innovation projects, attracting many global venture funds and high-tech firms.
Most Russian funds operate in accordance with international standards, which helps reduce the risks of partnerships associated with foreign funds.
When considering investing in Russian startups, investors take into account the fact that Russia is now Europe's largest market for Internet and mobile communications. More and more business opportunities are now emerging in high-tech areas. These include innovative software, nanotechnology, clean technology and biomedicine. Russia's consumer market is developing rapidly and GDP growth is noticeable.
Dozens of foreign funds are already operating in Russia due to the high level of science and technology, low labour costs (except for Moscow and some other cities) and the associated financing conditions due to the government's commitment to support innovation. Such funds may include: Accel, Alpha Associates, Dalderton, Bessemer, Headline (E.Ventures), Garage, General Catalyst Partners, Index Ventures, Intel Capital, Kinnevik, Mangroves, Rocket Internet, Team Europe, Tiger Global Management, Tomorrow's Ventures, UMJ, Ventech and Veritas Finance Europe. There is another viewpoint that there are relatively few investors investing in Russian business projects. Foreign investors underestimate the potential of the Russian market. One of the reasons for this is the lack of clarity regarding the completion of the project and the opportunity to return their investments. A venture capitalist should be confident in the possibility of successfully selling his business in 3, 5, 7 years or in the possibility of returning the investment in some other way. [8]
To date, the main problem is the lack of legal provisions and draft laws that are necessary to protect the rights of people who invest. The lack of regulation leads to fundraising without providing investors with sufficient guarantees. The market is in search of optimal organizational and legal models, but implementation of this institution in the legal system is still delayed.
At present, opportunities to obtain significant returns from projects are being studied and more and more information is being published on the growth of the value of companies operating in this field, which, to a large extent, also serves as a driver of their growth. [9]
The efficiency of modern business, as well as the efficiency of the country's economy, depends primarily on innovation. Until recently, there were only two ways to finance innovations. The first is that companies have invested (own or borrowed) funds in their research and development (R&D). The second is that R&D investments were made not by the companies themselves but by venture capitalists; they invested their venture capital (risk capital) in companies' venture projects and received a share in the capital of these companies.
In the venture capital financing system, there are two types of investments.
Two groups of investors are distinguished in the venture financing system: corporate (collective) and individual venture investors.
Startups are emerging in different sectors of the economy, which do not need to be tested in the West because many innovative business models are suitable only for Russia, meeting certain needs of the domestic consumer.
The startup ecosystem is highly centralized and directly dependent on the political situation.
IT companies, which were founded by experienced professionals with 20-30 years of experience, are the most
common in Russia. Currently, e-commerce can be noted as the dominant technology segment, and areas such as online, mobile advertising look very promising. 3D printing and robotics are also attractive.
In opinion of authors, it is possible to assert that the Russian startup-ecosystem now is at the same level as in the majority of the European countries. The number of accelerators, incubators and science parks is increasing significantly, which is a direct influence of the Skolkovo Innovation Centre, which is funded by the government.
The reason for investing in Russian startups is the low level of salaries and expenses for doing business in Russia. New developments in technology and engineering are available for business, and they are available at a much lower price than before the crisis in 2014.
A unique opportunity to invest was presented to foreign investors under conditions of a cheap ruble and, consequently, a reduced cost of the companies themselves.
The high return on investment in Russian startups is also accompanied by a high level of risk and associated uncertainty. Structural reforms at the macro level are required, which, in the authors opinion, may help bring the Russian economy out of stagnation.
Primarily high-tech Russian startups with stable and sustainable business models will be able to claim returns adequate to high market and political risks. [10]
The level of anxiety and uncertainty is reduced with every successful startup and mitigates the acuteness of foreign investors' perception of political risks in the Russian Federation. By supporting startups with domestic investments, the government creates a positive investment backdrop, and as a result, risks for foreign investors are reduced.
The development of startup business in the Russian regions under current conditions is hindered by the presence of interrelated problems of methodological, institutional, organizational, informational, marketing, investment and other nature. [11]
The lack of a unified approach to defining the main features of this economic phenomenon is one of the urgent methodological problems. In fact, in the economic practice of different countries in the world economy, startups can be identified from positions that differ in a number of aspects.
Startups as enterprises have the following characteristics:
- those companies that were founded and started working actively not more than a year ago;
- companies representing innovative businesses that differ from traditional views on the development of this sector;
- commercial enterprises that have a specific business plan;
- companies that generate income that does not exceed that of the startup;
- companies that have not outgrown the startup phase, i.e., not already acquired, managed by private foundations.
Startups will differ from traditional enterprises:
- the implementation of an innovative product or service project with a high level of uncertainty;
- the presence of innovation in the project, using innovative technology, an innovative commercial model or a qualitatively new way of meeting customer needs;
- presence of a large demand for the product or service being created, or anticipation of its rapid growth in the short term;
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- a proactive mindset among the creators of the startup company, the ability to learn on the job, collect feedback from customers and conduct an experienced product development process;
- no need for start-up funding, prototyping a viable product or service in the short term at low cost;
- considering financial support for the project, taking into account feedback from customers;
- high level of productivity and possible multiple return on investment over a relatively short period of time (3 to 5 years).
The following are the main characteristics indicating that startups are ready for the launch phase and for the start of their core operational activities:
- formed staff of the company or project company;
- a reasonable and achievable business plan;
- a formalized and documented system of business processes, accounting and tax accounting;
- the required registration and approval documents;
- the infrastructure necessary to manufacture products or provide services (taking into account the purchase and rental of relevant equipment, raw materials and supplies);
- the production of a pilot batch of a product or the provision of a pilot service.
Accumulating information about domestic startups, their main features include: the age of no older than 6 years, the implementation of the project from a commercial point of view, the reality of taking a significant part of the market niche producing goods and offering services, the presence of no more than 120 employees in the staff, the ability of the company to make decisions independently, etc., etc. [12]
Thus, the development of a unified system of characteristics for attributing companies to startups becomes an urgent theoretical and practical task that requires scientific justification.
The problem of institutional definition of the status of a startup company and its consolidation in Russian economic legislation is being solved.
Obviously, the identification of startups with innovative small and medium-sized companies and the application of the relevant requirements concerning the limit values of the number of employees, sales revenue, etc., which is taking place in business practice, becomes a factor limiting the development of innovative start-up business. [13]
In order to maintain its place in the world arena, Russia should give priority to the development of innovative enterprises and thus maintain the level of competitiveness of the country. Under the current conditions of changes in the world economic situation, observing a reshuffle of forces on the world arena, it is noticeable how the leading positions are occupied by countries offering something new.
The scientific activity of our country has always developed under the auspices of the largest state scientific research institutes. [14] Today, there is a need to develop small innovative enterprises so that they can become full market participants.
The Russian government is creating technology parks, business incubators and business accelerators, and encouraging the creation of venture funds.
A large number of both domestic and foreign studies are emerging which in turn summarize the experience of developed countries in supporting innovation activities, especially in small businesses. [15]
There are enough examples of effective development of national innovation systems in the world experience, one of which is a startup.
The word "startup" has gained popularity both in scientific and business environments. A startup is defined as a young, newly created, and possibly not yet a legal entity, a company with limited resources, based on an innovative idea or newly emerging technologies. [16]
The widespread belief that startups are launched only in the IT sphere is complemented by companies that open up in virtually any segment: medicine, industrial technologies, nanotechnology, etc.
Every year there is an increasing growth of the Russian venture market, both in terms of investment volume and the number of transactions.
Investors in the majority are ready to invest at later stages of development when there are more clear prospects of reception of certain profit from investments.
Conclusion
Thus, having analyzed all the above, we can draw the following conclusions. Firstly, predominantly high-tech Russian startups with stable and sustainable business models will be able to claim a yield adequate to high market and political risks. Secondly, the identification of startups with innovative small and medium-sized companies and the application of the relevant requirements concerning the limit values of the number of employees, the revenue from the sale of goods, etc., which is taking place in business practice, becomes a factor limiting the development of innovative start-up business. The volume and structure of venture capital and its availability to innovators ultimately determine the innovative activity of economic entities, the commercialization of innovation and competitiveness in the high-tech market.
References
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2. M.A. Katkova Efficiency assessment of institutional transformations in the Russian economy // Power. No 11. P. 61-68 (2014)
3. S.G. Kirdina Institutional matrices and the development of Russia: an introduction to X-Y theory. 3rd edition, revised, expanded and illustrated. - SPb.: Nestor-Istoriya. - 468 p. (2014)
4. T.H. Aliyev. Startup Financing in Russian Federation Economy: Problem and Prospects.// Izvestia of Far Eastern Federal University. Economics and management. №4 C.81-88. (2015)
5. Oxford English Dictionary. T. 1, Oxford University Press. 21730 c. (1989)
6. Kirillovskaya, A. - Pashkus, V. - Volkova, A. The Newest Economic Policy, Government Regulation of the Economy and Economic Security. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 2, Rajecke Teplice, Slovakia, pp. 870-875 (2016)
7. V.V. Volchik. Institutional changes: towards a general theory / V.V. Volchik // Journal of Institutional Studies. Vol. 4. № 4. P. 4-6 (2012)
8. I.G. Polyanskaya, V.V. Yurak Institutional assessment of environmentally oriented subsoil use // Economy of the region. V.13, issue. 2. - p. 355-368. Doi 10/17059/2017-2-3 (2017)
9. M.G. Orlov Mechanisms of impact of development institutions on the real sector of the national economy //
Strategic management of organizations: methods to improve competitiveness: Collection of scientific papers of the All-Russian Scientific and Practical Conference with International Participation / M.G. Orlov. - SPb: Publishing House of Polytechnic University (2014)
10. R.M. Nurtdinov, A.R. Nurtdinov Institutional system as a factor of sustainable development // Bulletin of Kazan University. Humanities series. V. 153, book 4. - p. 177-188 (2011)
11. Dengov, V. - Gregova, E. - Maksimov, A. Globalization in the Field of Food Retail St.Petersburg: analysis of the Price Policy. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 1, Rajecke Teplice, Slovakia, pp. 362-374. (2016)
12. A.M. Magomedov Institutional environment as a factor in the development of the regional economy [Electronic resource] // Management of economic systems: electronic scientific journal. Access mode: http://uecs.ru/regionalnaya-ekonomika/item/2168-2013-05-30-10-55-02 (2013)
13. Krueger Anne O. The Political Economy of the RentSeeking Society // American Economic Review. №64. P.291. (1974)
14. Ermolaev, K. - Salomatina, S. Synergetic Approach to the Development of International Institutions Regulating in the Conditions of Globalization. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 1, Rajecke Teplice, Slovakia, pp. 433-441 (2016)
15. Harumova, A. Multinationals as a Part of Globalization. Proceedings of the 15th International Scientific Conference of Globalization and its Socio-Economic consequences, part 1, Rajecke Teplice, Slovakia, pp. 192198 (2015)
16. D.S. Lebedev Institutional transformation of socioeconomic systems. Theory, analysis methodology, practice of application in Russian foreign trade: monograph / D.S. Lebedev. - 2nd ed., Rev. and add. - M.: "Prospekt" Publishing house. - 190 p. (2016)
Preconditions for investment in start-ups Kavalerchik M.N.
St. Petersburg State University
JEL classification: D24, D20, D61, D80, D92, O11, O12, M20
References
1. D. North Institutions, institutional changes and the functioning of the
economy [Electronic resource] // Center for Humanitarian Technologies. Access mode: http://gtmarket.ru/laboratory/basis/6310/6311. (2013)
2.M.A. Katkova Efficiency assessment of institutional transformations in the Russian economy // Power. No. 11. P. 61-68 (2014)
3.S.G. Kirdina Institutional matrices and the development of Russia: an introduction to X-Y theory. 3rd edition, revised, expanded and illustrated. - SPb.: Nestor-Istoriya. - $468 (2014)
4. T.H. Aliyev. Startup Financing in Russian Federation Economy: Problem
and Prospects.// Izvestia of Far Eastern Federal University. economics and management. No. 4 S.81-88. (2015)
5. Oxford English Dictionary. Vol. 1, Oxford University Press. 21730 c. (1989)
6. Kirillovskaya, A. - Pashkus, V. - Volkova, A. The Newest Economic Policy,
Government Regulation of the Economy and Economic Security. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 2, Rajecke Teplice, Slovakia, pp. 870-875 (2016)
7.V.V. Volchik. Institutional changes: towards a general theory / V.V. Volchik // Journal of Institutional Studies. Vol. 4. No. 4. P. 4-6 (2012)
8.I.G. Polyanskaya, V.V. Yurak Institutional assessment of environmentally oriented subsoil use // Economy of the region. V.13, issue. 2. - p. 355368. Doi 10/17059/2017-2-3 (2017)
9.M.G. Orlov Mechanisms of impact of development institutions on the real sector of the national economy // Strategic management of organizations: methods to improve competitiveness: Collection of scientific papers of the All-Russian Scientific and Practical Conference with International Participation / M.G. Orlov. - SPb: Publishing House of Polytechnic University (2014)
10.R.M. Nurtdinov, A.R. Nurtdinov Institutional system as a factor of sustainable development // Bulletin of Kazan University. humanities series. V. 153, book 4. - p. 177-188 (2011)
11. Dengov, V. - Gregova, E. - Maksimov, A. Globalization in the Field of Food Retail St.Petersburg: analysis of the Price Policy. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 1, Rajecke Teplice, Slovakia, pp. 362-374. (2016)
12. A.M. Magomedov Institutional environment as a factor in the development
of the regional economy [Electronic resource] // Management of economic systems: electronic scientific journal. Access mode: http://uecs.ru/regionalnaya-ekonomika/item/2168-2013-05-30-10-55-02 (2013)
13. Krueger Anne O. The Political Economy of the Rent-Seeking Society // American Economic Review. No. 64. P.291. (1974)
14. Ermolaev, K. - Salomatina, S. Synergetic Approach to the Development of International Institutions Regulating in the Conditions of Globalization. Proceedings of the 16th International Scientific Conference of Globalization and its Socio-Economic consequences, part 1, Rajecke Teplice, Slovakia, pp. 433-441 (2016)
15. Harumova, A. Multinationals as a Part of Globalization. Proceedings of the 15th International Scientific Conference of Globalization and its Socio-Economic Consequences, part 1, Rajecke Teplice, Slovakia, pp. 192-198 (2015)
16.D.S. Lebedev Institutional transformation of socio-economic systems. Theory, analysis methodology, practice of application in Russian foreign trade: monograph / D.S. Lebedev. - 2nd ed., Rev. and add. - M.: "Prospekt" Publishing house. - 190p. (2016)
The article provides a qualitative analysis of the Russian market trends for startups, based on the assessment of foreign investment market participants. The positions and approaches to the choice of investors are compared, which makes it possible to determine the key features and identify difficulties associated with investing in Russian startups. Investments in the fast-growing Russian business environment are viewed in terms of pros and cons. The authors suggest merging a significant number of startups by industry or territory into a single company with a legal form of an open joint-stock company. The authors propose a comprehensive approach to solving existing problems, which aims to help innovative startups to function successfully, and also to fulfil the broader objective of consolidating the innovative model as a means of ensuring competitive, sustainable and safe economic development in Russia.
It is underlined, that in different sectors of economy there are startups which do not require testing in the West because many innovative business models are suitable only for Russia, fulfilling certain requirements of the domestic consumer.
The purpose of the study is to identify the main reasons for the success of startups, to study the specifics of the decision-making process for providing state support, and to assess the existing risks to which private investors are exposed when investing in Russian companies.
Keywords: startups, venture capital investments, venture capital financing, corporate venture funds, crowd financing, innovation.
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