Development of the venture financing system in Ukraine

Abstract

This article explores the development of venture investment in Ukraine. The theoretical basis of venture capital, which is a way of  target investment ofinnovative developments can become a catalyst for the introduction of innovative technologies on the domestic enterprises. Particular attention is focused on the technology of transformation ofcapital into venture one. A comparative characteristics of different sources of innovation financin is proposed. It has been analyzed the history of venture capital funds in Ukraine. Two stages according to their appearance in the financial market of Ukraine are allocated. Special attention is paid to the specifics of innovation financing in Ukraine. Considering the unstable political and economic situation in Ukraine it has been investigated the activity and dynamics of quantity of professional participants of joint investment institutions. The areas of venture capital investment in the domestic economy are singled out and it has been made a comparison with the Europian countries. The reasons of such sectoral structure of venture capital are grounded, in particular it has been proved that Ukrainian venture capital tends to realize middle-risk and short-term investment projects. We also believe that the majority of domestic venture capital funds do not fulfill their economic functions. In Ukraine venture funds are used primarily to optimize asset management of financial and industrial holdings and tax reduction (exemption from income tax). In addition, the law regulation of venture business in Ukraine does not consider specific factors of influence. Further research in this area will cover the creation of favorable conditions for the development in Ukraine of high risk investments, the development of special system of state incentives for the creation of venture funds and companies.