Venture investment is a relatively new concept for domestic investors and much more incomprehensible to their potential "colleagues". Such a financial instrument in our country is only gaining momentum. Equal interest in it is equally shown by both investors and persons who attract such investments and claim to receive them.

This financial instrument is aimed at the development of new, promising types of entrepreneurial activity and author's innovative ideas, the owners of which do not have sufficient funds for their implementation. Those. actually invests his capital in the promising business of another, in the hope of getting his share of the profits from this.

The mechanism of this type of investment is quite simple. A venture investor, depending on the goals of the investment project and the stage of its development, invests in a certain project, as a result of which it becomes either a co-owner of the business being created, or its creditor. As a rule, venture financing is attracted in order to hope for a more significant scale of development of the type of economic activity, and, accordingly, a faster return on investment.

Such a financial instrument has significant risks of capital loss, which are associated with the uncertainty of the prospects for the product being developed, technology and the market as a whole. In this regard, investors are trying to control their risks, which is why they are quite knowledgeable, and the companies themselves, applying for financing, undergo a rather rigorous selection.

It is worth noting that a professional investor, in order to achieve maximum productivity of his investments, does not just make an investment, he brings his strategy, vision of prospects, practical and tactical experience, contacts and connections into the business. Only such an approach can increase venture investments, the full return of which must be made within 3-7 years. Both individuals and legal entities - specialized venture associations, companies and funds - have the right to provide this kind of financing. On average, the amount of such investment injections ranges from 500 thousand to 5 million USD. Investors can profit in several ways - from dividends to the difference in the value of shares when they are bought and sold. However, about everything - in order.

Stages of provision of venture investments

As a rule, such financial injections from the investor's side are targeted and aimed at solving certain problems - from building a team and conducting research, developing a finished product to directly expanding the scale of production and entering new markets. This is also associated with the mechanism of operation of the most popular venture capital investment strategy - a phased investment. It is based on the definition of the time frame - the stages of development of the financed enterprise, the correlation of these stages with the significant points of the development of the enterprise, agreed in advance with investors, and the implementation of the implementation of these points of the financing itself. Thus, there are 6 stages of financing venture business:

• Pre-sowing stage
• seed stage
• First stage
• Second stage
• Third stage
• late stage.

Naturally, each of the stages may involve a certain amount of investment provided to achieve certain goals. Thus, the pre-seed stage involves the allocation of a relatively small amount of money to the author of a potentially profitable idea for the justification of the concept, marketing research or product development. Providing funding for the seed stage of development pursues the goals of conducting deeper research and releasing trial batches of products. The purpose of financing in the first stage of business development, as a rule, is the release of the first commercial batch of products, if all previous investments have already been spent by the company. Financial injections at the second stage of business development are aimed at increasing turnover and creating stocks of products.

Despite significant business progress, profits begin to flow only at the third stage of development, characterized by the steady development of the company and an increase in sales rates. Only then can the company qualify for the provision of investments aimed at improving the product and expanding production.

The late stage of development implies a steady trend of the company's entry into the stock exchange. Investments in this time period can have a different focus, and often "beat off" after the initial proposals on the exchange. The amount of investment at this stage is the highest, the risk of losses, respectively, is quite low.

Traditional Ways for VCs to Profit

Depending on the investment strategies and the conditions for their provision, investors may qualify for different ways to profit from their investments. Among these methods are:

• Receiving dividends
• Sale by an investor of his share
• Redemption of the investor's share by the enterprise
• Public offering of shares on the stock exchange
• Loan interest.

On average, after obtaining the status of publicity and entering the stock exchange, that is, at the time of the liquidity of the venture business, the investor's annual dividends range from 20 to 50% of investments. The amount of profit from the sale of a share of shares is usually measured in hundreds of percent. The main return begins after 5-7 years from the moment of the first financial injections. As for the loan interest, it is determined on an individual basis, but, as a rule, 5-10% higher than the bank rate.

Development of venture investment in Russia

Until the early 2000s, venture capital investment in Russia was carried out only at the expense of foreign capital, and only after 2001 did Russian investors begin to create funds with domestic capital. And this despite the fact that abroad, venture capital investment has flourished since the early 60s! Listening to the experience of other countries in this matter, the Russian leadership was able to see the advantages of developing venture financing only by 2006, after which the activities of investors in this industry began to be regulated at the legislative level.

A significant role in the development of this type of investment was played by the creation of the Russian Venture Company, whose main goal was to invest in venture funds. At the same time, the Russian Association of Venture Investments was created, which actively contributes to the development of the above funds.

Today, experts note a real boom in the development of venture capital investment in Russia. The growth dynamics of investment funds, the size of investments and the volume of investments as a whole allowed our country to take 4th place in Europe in terms of development and investment in innovative business sectors.

Inventions and innovations are the main drivers of the modern economy. And its main driving force in the new millennium is the so-called "garage" startups. Google, Apple, Amazon, Microsoft, Twitter- these are only the most striking examples of companies that were created almost on naked enthusiasm, and after leaving the underground, they conquered the entire globe.

Financial analysts believe that the time of the "dinosaurs" of the IT market is coming to an end. Today, the initiative is gradually seized by those who have creative ideas and the desire to implement them. And venture capitalists help young people to turn a bold idea into reality - people who are ready to invest in the most risky project, of course, for their piece of the common pie.

As a separate type of business, venture capital originated in the United States.

At first, such investors were considered courageous adventurers, but gradually this attitude began to change and today they are more like ordinary bankers and entrepreneurs.

There are legends here too. Arthur Rock, Tommy Davis, Tom Perkins, Eugene Kleiner and many of their like-minded people are considered the first venture capitalists. The investments, knowledge and experience of these people have played a key role in the development of the modern IT industry.

Venture fund in simple terms is an organization that invests its own money and the money of investors in projects or enterprises that are at the start-up level.

The activities of a venture fund are associated with great risks, since about 80% of investments do not generate income or do not have the opportunity to pay off at all. Nevertheless, the remaining 20% ​​bring large incomes, more than cover all losses.

Many of our entrepreneurs are almost unfamiliar with this concept, because such funds began to appear relatively recently in the CIS. But for their colleagues from the USA and Western Europe, it was they who became a real ticket to big business.

Venture fund ( venture- translates as risk, risky investment) is an investment organization that accumulates funds in its accounts and uses them to finance young innovative projects and enterprises in order to make a profit. The main criterion for investing is the success of a startup and its commercial value in the short term. For this reason, the choice of a suitable object for investment is now carried out by highly qualified economists who rely on criteria such as:

• innovation;
• the possibility of using patented technologies and various know-how in the work of the enterprise;
• cost recovery in the shortest possible time;
• the prospect of becoming a pioneer in their field with the subsequent monopolization of this market segment.

Like many types of business and entrepreneurship, venture capital funds were created and finally formed in the United States.

What is a venture fund for the first time the world learned in the eighties of the last century, at a time of incredible technological progress and the introduction of unique developments in the field of electronics. By 1985, there were approximately 650 organizations in the states willing to provide investments in this format. Developmentprojects were also actively supported by the US government, which provided assistance to entrepreneurs in this area of ​​venture capital investment. In 1987, venture capital funds reached the peak of their development. The volume of investments by that time amounted to a total of more than four billion dollars.

The main business of venture funds is investments in securities. However, the legislation allows these organizations to carry out more risky activities, so they can not only buy out the rights to a share of the total capital, but also lend to companies (for example, by purchasing promissory notes).

Currently, venture capital funds, as a rule, are engaged in supporting projects with an average degree of risk.

The standard amount of investment in one project is $1-5 million.

That is why such funds mainly work only with institutional investors - official investment companies.

In Russia, the venture capital market is relatively poorly developed. Due to the fact that the experience of such work is very small, most companies are still not ready to risk their money, having practically no guarantees for a return on investment, especially for earnings. But funds have begun to appear in recent years, which means that we can hope for good prospects for the development of this area in the Russian Federation.

Reputable venture funds in Russia

1. Softline Venture Partners. The company invests in projects at the earliest stages. More than others, this fund is interested in the areas of IT technologies, cloud storage and information security.
2. Russian Vetures. The fund is engaged in investments in Russian projects. For example, the company cooperates with such projects as Molniya (news feeds on the Internet), Atlas (mobile communications).
3. Adventure 2. The Fund is ready to provide both financial and informational assistance to projects that are of interest and have a built business model.
4. RBK. Powerful fund established in 2009. The Fund focuses on projects with the potential to conquer the world market, promotes the progress of companies engaged in the scientific and technical field. The venture capital of the company and its partners is about two billion dollars.

Venture capital fills the void

This source of funding today plays a significant role in the development of innovation. According to analysts CrunchBase, over the past 20 years, venture capitalists have invested more than $ 10 billion. There are projects funded from the state treasury, there are completely amateur undertakings that are sponsored by business angels or developed at the expense of personal funds, and everything else is the work of venture funds.

Venture investments fill the void between corporations and governments on the one hand, and private investors and the entrepreneur's friends and family on the other, as sources of funds for innovation.

Features of venture business

• Big risks. It is impossible to accurately predict the development of the company, even taking into account all known parameters.
• Quick return on investment(on average, the promotion of the company takes from 3 to 5 years).
• In any case, the investor will have to participate in the life of the project because he is personally interested in its successful development. Throughout the process, consultations, research and other similar activities are carried out.
• Invested funds are often withdrawn immediately after the company reaches a sufficiently high level of development.
• People can also be invested who have original ideas and have already had successful experience in implementing their projects in the past.

How to invest in a venture fund

There are several ways to become a venture investor:

Crowdinvesting platforms.

Investing through thematic investment platforms in order to make a profit is a popular way in the West (and more recently in our country) to make money on startups. In this case, the investor receives:

• royalties (percentage of project income);
• return of the deposit with interest;
• share in the company after its reorganization into a joint-stock company.

Convenient for novice investors. They allow you to gain experience by investing little money in many projects at once. However, the risk that startups will be unprofitable, or even not implemented at all, is also very high.

Investing through investor clubs.

In this case, the investor entrusts the search for a suitable project and the organization of the transaction to the club, for which the latter receives a commission. The main benefit is that the investor spends a minimum of time and effort on organizing the process. In addition, clubs provide an opportunity for co-investment, so even a beginner has a chance to enter a good project with a minimum amount.

Invest in a venture fund.

Option for experienced investors. The main advantage is a professional selection of projects and a minimum of time and effort. All the work is done by the fund's employees - they distribute venture investments, assess risks, conduct market research and everything else. The investor only receives income, of course, minus interest for capital management.

This option also has its limitations. The main thing is a high entry threshold. The lower investment limit averages around $500,000. In addition, many funds work only with trusted people, so newcomers will first have to personally negotiate with the management of the investment company.

Creation of own venture fund.

This option carries the highest risks and costs, but even if successful, the profit will be much greater. Those wishing to establish their own fund need not only to know in detail what a venture fund is and how it functions, but also to invest a substantial amount in organizing the process. According to the average estimate, in order to rent an office, assemble a team, find a suitable project, perform market research, launch production, conduct an advertising campaign and legally arrange everything, you will have to spend an average of $10 million. However, the final amount depends on the size of the enterprise. For those who are not ready to lay out serious money, it is better to realize themselves as a business angel, where investment amounts start from several tens of thousands of dollars.

How much can you earn on venture investments

Today there are many examples of successful development of young startups by venture funds. The most obvious of them are the following:

As you can see, venture business, despite the high financial risks, is very promising and can bring huge profits. According to the latest data from the largest online database of investors and IT startups CrunchBase, on average, each promising startup today attracts approximately $25 million investments, and after promotion and transformation into a joint-stock company, it is sold for 180-200 million. For the investor, the profit is several hundred percent.

Therefore, those who have a good foundation for a start and are already well versed in the basics and nuances of investing can not only earn money, but also become the founding father of a new direction in the IT industry.

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Venture capital investment has helped many companies reach a high level and brought a lot of money to investors who believed in young and talented professionals. But this does not change the fact that this activity is inevitably associated with high risks.

Venture investments and venture business

Such investments can be characterized as the investment of financial resources in a specific company, project or idea, which are at the very beginning of their development and implementation. Of course, such an investment is associated with high risks. But at the same time, many investors are ready to act, because if the project develops successfully, they will receive significant profits.

We can say that the risk that accompanies direct venture investments is proportional to the level of possible income.

As a rule, progressive developers or novice businessmen form an actual idea, which in the future can bring a very high income. But, as is often the case, they do not have the necessary funds to launch the project. In this case, startups turn to investors, presenting their idea to them. Those who agree to finance a risky project with a bright future become co-owners of the newly formed company.

So venture capital investments are one of the ways to earn fast and risky money. At the same time, it is also possible to purchase shares of a company that has recently entered the stock market. There is also an expectation that the value of securities will increase significantly over time.

Types of venture investments

In principle, it would be logical to distribute by type not the investments themselves, but the companies that apply for them.

You can start with a startup. This is a company that was recently formed and, accordingly, does not have a long market history. Such organizations are in need of funding, due to insufficient funds for research and development activities and the organization of subsequent sales. Venture investments in startups are one of the most popular areas.

Investing in a project that is at the idea level. In this case, there is also a need for additional research and testing to create pilot samples of the product before it is brought to the market.

Investments can also be attracted by those companies that are already fully functioning, but are experiencing a crisis of funds needed to expand sales and production. Financing is often used to increase fixed assets of working capital or to conduct market research.

Another object of interest for investors may be an organization with finished products, but at the same time being at the initial stage of commercial implementation.

As you can see, venture investments are a fairly popular investment direction.

Venture business

This term should be understood as investments, which in most cases have the form It is invested, as a rule, in fast-growing enterprises that demonstrate significant potential. Such funds are often directed towards the implementation of topical technological innovations.

Such funding is focused primarily on the commercialization of the results of scientific research in high-tech and science-intensive areas. Prospects for such investments are not guaranteed, and the risk, of course, is significant.

In this case, venture capital investments are the type of financing in which investors are not focused on receiving dividends. Their goal is to sell their stake in the company after its market value is high enough.

With regard to the process of selling such a share, it can be put up on the open market. Another company developing in the same area is also capable of buying it. The interest of business partners, who will be happy to increase the percentage of their investments in the framework of a particular project, is not ruled out.

Entry threshold for investment

In order to understand the essence of venture investments, it is worth considering the mechanism of their action, which may have certain features. One of them is the high entry threshold.

We are talking about the following fact: venture investment requires a minimum of 10 thousand dollars, and in some cases several million. Therefore, for those who have a couple of thousand, it makes no sense to consider such a prospect.

But at the same time, there is an alternative for those who have a little money and are willing to risk it. This opportunity is provided by joint investment institutions or funds. Each such fund has a manager whose activity is limited to the accumulation of funds from small investors and their subsequent investment in a promising project. The risks do not become less.

A tangible and obvious disadvantage of such a scheme is that all fund participants are forced to rely on the competence of the manager, not being able to make their own decisions.

Lack of control and long investment horizon

Another feature of venture investments is that none of the persons financing the project seeks to own or manage the company. The only thing they agree to is the risk of losing investment. As for the responsibility for the development of the project, it falls mainly on the shoulders of top managers. But if the company is developing rapidly, and investors fix the wrong, in their opinion, facets of the strategy, then they can become directors to exercise personal control over the organization's activities. But this is more the exception than the rule.

As for the long investment horizon, we are talking about the inability to withdraw the invested funds at any convenient time. This is due to the fact that almost always the entire amount of investments is mastered by the project, and they can be received only if the company manages to stay on the market. Initially, it should be understood that some companies may need several years from the date of launch to enter the stock market.

No guarantees

Venture investment is a type of investment in which players receive either all or nothing. This means that after the fact of financing, the investor can wait years for the company to develop and eventually sell his stake for several million dollars. But there is a risk that after a long wait, the project will be unprofitable and all investments will be lost. In the overwhelming majority of cases, the real profit of startup participants can be determined only after the company's shares are publicly placed on the stock exchange. As a result, the price of the company's shares will be determined by its

Situation in Russia

If we consider Russian venture investments, it is worth noting that this direction of financing cannot be called particularly popular in the CIS. Initially, even the most promising projects within the Russian Federation were invested mainly by foreign investors. But at the moment, Russian ones have already formed and are developing this type of investment. For example, OJSC Russian Venture Company, together with the REVI Association, monitors various funds on an ongoing basis and provides qualified assistance in their development.

Various specialized presentations, forums and exhibitions are organized for these purposes.

Conclusion

Venture capital investment is certainly popular in the world, as it allows bright companies to develop and often brings fabulous returns. But it is worth remembering that many investors have lost funds invested in seemingly promising projects. Therefore, we can conclude that this path is for experienced businessmen.

• • When plans materialized

Definition of venture investments

Venture investments are financial investments in a company at the stage of its formation and growth. Or, more simply, it is the financing of promising start-ups. The term “venture” itself (derived from the English “venture” and meaning “risk undertaking”) implies investing in an innovative business that is not known to anyone and, therefore, does not have access to the main stock markets.

An investor who is willing to risk money and spend in favor of a start-up company, in exchange for the money invested, receives an ownership interest in this company. Today's billion-dollar cutting-edge giants such as Intel, Apple, Compaq (today's HP) and many others managed to rise and develop in their time thanks to venture capital investments made by far-sighted and successful investors.

In venture capital investment, the risks for the investor and the entrepreneur are almost equal

Attractiveness and risks of venture investment

Venture investments are capital with a high risk of loss, it is a bet on the "dark horse" of the business. The risks can be very diverse, ranging from the incorrect distribution of cash flows, ending with miscalculations in the forecasts of possible profits. Therefore, as a rule, venture capital is invested in shares or shares in which the degree of possible risk is compensated for by success with a very high share of profit. The main sources of venture capital investment are mutual funds, venture capital firms or private investors (business angels).

Venture investments in a company allow investors to be closely connected to the workflow of the enterprise.

VCs can provide due diligence and help with planning, as well as advise during meetings. Thus, in addition to the monetary part, business angels often contribute their time, connections and valuable experience to the process of becoming a sponsored company.

However, the sole purpose of all venture capital investments is to get the maximum return on investment, hence most investors are looking for ventures and companies that have a real chance of financial growth.

Ideal companies for venture investments

Enterprises that are attractive for venture investments should have high growth potential. The current status of the company is not so relevant (it happens that there are investors even for a project that exists at the initial stage of its development, the so-called "seed investments"), but the prospects for its development.

The choice of most venture capital funds is made in favor of companies that can offer significant turnover in the next five years. Thus, there are general beacons of attractiveness for venture capital investment, which include:

• high growth prospects;
• an ambitious team
• experienced management;
• the ability to turn plans into reality.

Venture programs and investments in startups

Venture investment process

The term of financial investments in a venture project usually lasts from three to seven years. Venture investments to introduce innovations in mature businesses, where production growth is faster, will also lead to a return on profits. In enterprises where the development of a business model takes a lot of time, it is natural that longer periods of financial investment will be required before the desired profit is realized.

Most venture investment deals can take anywhere from a month to a year to close. A typical period of three to six months is considered normal. There are also quick offers, but these are exceptions.

The speed of funding largely depends on the type of information that was provided to venture investors for consideration.

The process of acquiring venture capital investments begins with an evaluation of the business plan. (See How to compose). The main aspects that, according to potential investors, can motivate risky financial investments in a particular enterprise are as follows:

• the viability of the product or service;
• potential for sustainable growth of the company;
• effective team management for the effective operation of the company;
• the ratio of risk and expected profit;
• substantiation of venture investment and investment criteria.

Evaluation and selection of the company is accompanied by the structuring of venture investments. As usual, venture investments are made in equity capital. Investors receive, according to costs, a share in the enterprise, and the shares of existing shareholders are reduced. At the same time, all the money goes exclusively to the development of production.

A feature of venture investments is that they are usually intended for the launch, growth, development of a particular company, whose activities bear at least a slight shade of originality, uniqueness, i.e., roughly speaking, with venture financing, funds are invested in the implementation of some a new idea that has not yet been proven by the market to work. In this regard, venture investments involve a fairly high risk of capital loss by the investor; at the same time, in the event of a favorable development of events, they can count on impressive profits. Most often, venture investments are attracted to develop various innovative technologies, new methods of market development, etc. Those. venture investments usually become relevant where there is some kind of experiment, a certain amount of risk (associated with the possibility of unsuccessful implementation of the conceived idea). Accordingly, venture investments, as a rule, are long-term, because they are attracted with the aim of “inventing”, creating and promoting a particular project, which later (as its creators think) can fill some new niche in the market and bring a solid profit .

As a rule, the investor receives profit from venture investments not in the form of periodic dividends, but in the form of a (one-time) sale of his share in the business, which he financed at the stage of its inception.

The differences between venture capital investment and any other type of investment are as follows:

• 1) investments are made in exchange for a block of shares in a company in the early stages of development;
• 2) venture investments go to the company itself and finance the project of its growth and development;
• 3) the task of the investor is to ensure rapid growth in the value and capitalization of the business;
• 4) the investor assumes the financial risks of successful implementation, expecting high returns;
• 5) the period of "stay" of the investor in the venture company - from 2 to 5 years;
• 6) the investor is not interested in the distribution of profits and prefers to invest it again in business development - reinvest;
• 7) in addition to investing in the company, the investor uses his management experience and business connections;
• 8) the return of funds from venture investments is carried out at the end of the investment period in the form of profit from the sale of the investor's share that has increased in price.

Although, in addition to focusing on successful small enterprises with the potential for rapid growth, venture capital also has a number of additional features.

Here is a short list of the main distinguishing features:

Since, in order to realize investments with a profit, namely those made in venture enterprises, it is necessary that a new high-tech company enter the securities market to sell shares, the owner of the funds invested in the company is not interested in dividends, but in the level of capital increase. Venture capitalists who have invested in venture capital companies tend to want to increase their capital by at least 5-7 times over 7 years. Since the entry of a venture enterprise into the stock market can be carried out, at best, after 4 years from the moment of investment, and, realizing this, the venture capitalist does not expect to receive a profit before this period. During this period, this capital is illiquid, and the amount of profit will become known only after the company enters the securities market, when their block of shares is sold to those who wish for an amount significantly exceeding the amount of funds originally contributed to the company.

And this "excess" can sometimes be quite significant. For example, in Russia, one small research team, thanks to a very modest investment (several thousand US dollars), managed to create the drug "Timogen", which has powerful immunomodulatory properties, interest in which was shown in several countries at once. As a result, only one license for the production of the drug was sold in the US for several million dollars. Such a profitability of several thousand percent cannot be given by any production project, and even financial and banking machinations common in Russia in the recent past. Such an incredible increase in profits can only be caused by venture capital business.

A characteristic feature of venture investments is that the desire of the investor to acquire a controlling stake in the company is practically absent, which fundamentally distinguishes him from a partner or a strategic investor. The investor assumes financial risk, and other types of risks: market, technical, price and management, etc., are assigned to management, which has a controlling stake in the enterprise.

Given the nature of the venture business, almost any such investment, regardless of the stage of development of the new company, is a financial transaction with a high degree of risk, the degree of which, combined with courage and patience, can only be justified by the high profitability of the invested high-tech enterprise in the later stages of its development.

Taking into account the degree of risk, and the fact that in the event of an unsuccessful investment in the company, the investor will lose all invested funds, capital owners, in order to reduce risk, are directly involved in the management of the company, being members of the board of directors, as well as when investing by business angels. For the same reason, venture capitalists are often personally involved in the selection of investment objects, and still always strive to conduct several venture operations at the same time, therefore, they are ready to work with both new and existing ones, as well as companies preparing for sale.

In order to reduce risk, a venture capitalist usually distributes his assets among several projects, although it is possible that several investors support one project. To do this, with the introduction of venture resources, phased financing is used. Funds are allocated in small portions "tranches", in the slang of venture businessmen this means "through a drip", i.e. each subsequent financial injection is possible only after a successful previous one.

Also, venture investors, investing where the bank (for reasons of caution or by charter) does not decide to invest, receive not just a block of ordinary or preferred shares. But at the same time, they negotiate a condition (by purchasing preferred shares) according to which they will have the right to exchange them for simple ones at the onset of a critical moment in order to similarly gain control over the “chondrous” company and try to take it away from bankruptcy by a radical change in strategy. Such actions are fully justified, because. venture investors take huge risks by transferring their funds to the shares of other companies, hoping to receive high profits, which are characteristic of the most successful companies in the field of high technologies, the share price of which increases several times over 5-7 years.

The decisive role in the success of an enterprise often belongs to the quality of management actions, and not to the fundamental idea that is the basis of the technological process and products. Therefore, a venture businessman pays less attention to the subtleties of a scientific idea, and prefers to thoroughly assess the potential opportunities for capitalization of this idea and the managerial abilities of the head and administrative level of the company.

The venture investor continues to work with the sponsored company until it not only firmly "gets on its feet", but also becomes a "tidbit" for potential buyers. When such a moment comes, the former owner of the invested funds, and now the owner of a popular block of shares, considers his mission completed and exits the investment, releasing funds frozen over several years and receiving a well-deserved profit.

To withdraw funds, a venture capitalist has two very real options:

• - sell your block of shares on the stock market, for this purpose by first placing the shares in an open subscription "initial public offering-IPO";
• - either directly sell the company or part of it to such a buyer who offers an amount that provides the investor with the amount of profit predicted by him. As a result, a venture investor, as a rule, forever says goodbye to the company that was “native” to him for 5-7 years. And judging by the practice of the money, effort and time spent, such a “parting” does not cause sadness.

And, despite the fact that venture investments are inherently risky, it is this excessive risk of investing in an unknown company that represents the most significant limiting factor for a potential investor considering where to invest free capital with the greatest profit. Buy shares in the oil business, invest in a new company that develops the technologies of tomorrow, which is fraught with risk, or put funds in a bank, at least at a low, but guaranteed interest rate.

Although absolutely risk-free financial transactions, in principle, do not exist - life is replete with examples when oil companies also collapse, and the most reliable banks become bankrupt (here Russians remember the collapse of banks in 1998), and that risk, which seemed to many so big and more than obvious, in reality turned out to be clearly exaggerated. In addition, it turns out that those who dared to take risks received a very significant bonus for their risk.

Another very significant feature of venture capital investment is that venture financing is always very sensitive to fashion and takes into account its trends. Most often, investments are made in those industries that are associated with a quick and profitable opportunity to sell high-tech science-intensive products that are already in high demand, or this demand is just emerging and threatens with big profits.

For example, at the end of the last century, a mass enthusiasm for reading CD devices began, and immediately venture capitalists began to invest huge amounts of money in this industry with great willingness and on favorable terms for companies. And with the departure of this fashion, the flow of investment dried up. The same phenomenon was observed when the cell phone craze emerged. It can also be predicted in the near future for services that have ceased to be knowledge-intensive services to provide access to the Internet. Of course, after some time, the production of software for personal computers will lose its profitability, which will also lead to a reduction in venture investments in this sector of the economy, since there are no, and in principle, no permanent sectors of the economy, forever attractive industries for venture investment. Only the desire of venture capitalists to increase their funds will be eternal.