Russia advocates for legislating venture capital investments

In a recent discussion, key figures from the Russian business and political spheres gathered to address the need for a comprehensive venture investment law to drive the development of science-intensive technologies in Russia.

The session, moderated by Ruslan Sarkisov, Managing Partner of the Vostok Venture Fund, brought together Deputy Chairman of VEB.RF Igor Drozhkov, General Director of the Moscow Venture Fund Yulia Povolotskaya, Deputy Prime Minister of the Republic of Sakha (Yakutia) Anatoly Semenov, General Director of Reksoft Consulting Andrei Skorokhin, Executive Director of the Russian Direct Investment Fund Anton Urusov, President of the Cognitive Pilot Group Olga Uskova, and several other notable figures.

Sberbank, a major player in the Russian market, already has its own micro-venture market focused on long-term tech investments. However, the success in the global tech race requires funding not just for innovations, but for breakthrough science-intensive technologies as well.

Classic venture capital is designed for 5-7 years, but true breakthroughs often demand over 10 years and substantial early-stage investments. Sberbank's Deputy Chairman stated that they constantly monitor global innovations to create their own disruptive solutions. Their second direction is labs, where they research potential promising technologies, find a team, and create solutions or collaborate with external startups when they see a potential promising technology.

Russia's annual venture investment market is significantly smaller than in other countries, currently standing at $200 million. To bridge this gap, a comprehensive venture investment law is needed to reduce uncertainty, create transparency, and ensure predictability. Currently, Russia has several different regulations for venture investments, but no standalone law.

The state should also support the infrastructure of venture investments, as digital innovations require powerful data centers. Commercialization of breakthrough science-intensive technologies can take years and involve immense risks. To address this, the state should establish a transparent regime for both startups and venture funds.

Discussion participants explored under what conditions private investors are willing to enter projects with a 10-15 year horizon. As of now, there are no clear public updates or confirmed progress on the establishment of a legally regulated, comprehensive venture investment law in Russia.

In conclusion, the discussion highlighted the need for Russia to follow the lead of leading countries with active venture investment development and establish a comprehensive venture investment law and state support to develop science-intensive technologies.