Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
Publicación cientíca en formato digital
ISSN-Versión Impresa 0798-1406 / ISSN-Versión on line 2542-3185
Depósito legal pp 197402ZU34
ppi 201502ZU4645
Vol.40 N° 74
2022
Recibido el 15/05/2022 Acpetado el 18/06/2022
ISSN 0798- 1406 ~ De pó si to le gal pp 198502ZU132
Cues tio nes Po lí ti cas
La re vis ta Cues tio nes Po lí ti cas, es una pu bli ca ción aus pi cia da por el Ins ti tu to
de Es tu dios Po lí ti cos y De re cho Pú bli co “Dr. Hum ber to J. La Ro che” (IEPDP) de la Fa-
cul tad de Cien cias Ju rí di cas y Po lí ti cas de la Uni ver si dad del Zu lia.
En tre sus ob je ti vos fi gu ran: con tri buir con el pro gre so cien tí fi co de las Cien cias
Hu ma nas y So cia les, a tra vés de la di vul ga ción de los re sul ta dos lo gra dos por sus in ves-
ti ga do res; es ti mu lar la in ves ti ga ción en es tas áreas del sa ber; y pro pi ciar la pre sen ta-
ción, dis cu sión y con fron ta ción de las ideas y avan ces cien tí fi cos con com pro mi so so cial.
Cues tio nes Po lí ti cas apa re ce dos ve ces al año y pu bli ca tra ba jos ori gi na les con
avan ces o re sul ta dos de in ves ti ga ción en las áreas de Cien cia Po lí ti ca y De re cho Pú bli-
co, los cua les son so me ti dos a la con si de ra ción de ár bi tros ca li fi ca dos.
ESTA PU BLI CA CIÓN APA RE CE RE SE ÑA DA, EN TRE OTROS ÍN DI CES, EN
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nes Cien tí fi cas y Tec no ló gi cas Ve ne zo la nas del FO NA CIT, La tin dex.
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Eduviges Morales Villalobos
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Ma ría Eu ge nia Soto Hernández
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Carmen Pérez Baralt
Co mi té Ase sor
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Re vis ta Cues tio nes Po lí ti cas. Av. Gua ji ra. Uni ver si dad del Zu lia. Nú cleo Hu ma nís ti co. Fa-
cul tad de Cien cias Ju rí di cas y Po lí ti cas. Ins ti tu to de Es tu dios Po lí ti cos y De re cho Pú bli co
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com ~ loi chi ri nos por til lo@gmail.com. Te le fax: 58- 0261- 4127018.
Vol. 40, Nº 74 (2022), 63-90
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Prospects of state regulation of venture
entrepreneurship in Ukraine
DOI: https://doi.org/10.46398/cuestpol.4074.03
Maryna Tymoshenko *
Nataliia Bondarchuk **
Iryna Lytvyn ***
Iuliia Kostynets ****
Oksana Bieliakova *****
Abstract
Using general and special scientic methods and generalized
statistical data, the article reveals the essence of venture
entrepreneurship, identies the features and inuence of
venture investments on the innovative development of the
Ukrainian economy in conditions of limited state resources. It
has demonstrated the need to develop a strategy to improve the
investment climate and expand venture investment in Ukraine,
the main measures of which should include: improvement of the legislative
framework; development of the innovation ecosystem in accordance
with major global trends; formation of a favorable investment climate
and tax regime for investors; development and implementation of new
organizational and legal forms of venture investment; creation of conditions
for the development of infrastructure units of the entrepreneurship
ecosystem; formation of conditions for the development of innovative
entrepreneurship in the real sector of the economy, as well as in the
scientic and technical sphere, etc. It concludes with recommendations on
the need to increase the volume of venture capital investments in high-tech
projects with an emphasis on the defense industrial complex, IT sphere and
construction, among others.
* PhD in technical sciences, Associate professor of Department of Entrepreneurship and Business
Economics of University of Customs and Finance, Dnipro; Dnipro, Ukraine. ORСID ID: https://orcid.
org/0000-0002-0288-9750
** Doctor of Science in State Administration, Professor, Head of Department of Management, and public
administration of Dnipro State Agrarian and Economic University. Dnipro, Ukraine. ORСID ID:
https://orcid.org/0000-0002-0418-5239
*** Candidate of economics sciences PhD, Associate Professor of Management and International Business
Department of Lviv Polytechnic National University; Lviv, Ukraine. ORСID ID: https://orcid.
org/0000-0002-6233-4431
**** Doctor of Science in Economics, Associate Professor, Professor of Department of Marketing,
Economics, Management and Administration, National Academy of Management ORCID ID: https://
orcid.org/0000-0001-6427-675X
***** Doctor of Economics, Associate Professor, Head of Management and Entrepreneurship on Maritime
Transport department of Azov Maritime Institute National University "Odessa Maritime Academy,
Odessa, Ukraine. ORСID ID: https://orcid.org/0000-0003-0363-4239
64
Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
Keywords: venture entrepreneurship; business and investment;
innovation and government regulation; startup; risk
management.
Perspectivas de la regulación estatal del espíritu
empresarial de riesgo en Ucrania
Resumen
Mediante el uso de métodos cientícos generales y especiales y
datos estadísticos generalizados, el artículo revela la esencia del espíritu
empresarial de riesgo, identica las características y la inuencia de las
inversiones de riesgo en el desarrollo innovador de la economía de Ucrania
en condiciones de recursos estatales limitados. Se ha demostrado la
necesidad de desarrollar una estrategia para mejorar el clima de inversión
y expandir la inversión de riesgo en Ucrania, cuyas medidas principales
deben incluir: mejora del marco legislativo; desarrollo del ecosistema
de innovación de acuerdo con las principales tendencias mundiales;
formación de un clima de inversión y un régimen scal favorables para los
inversores; desarrollo e implementación de nuevas formas organizativas y
legales de inversión de riesgo; creación de condiciones para el desarrollo de
unidades de infraestructura del ecosistema de emprendimiento; formación
de condiciones para el desarrollo del espíritu empresarial innovador en
el sector real de la economía, así como en el ámbito cientíco y técnico,
etc. Se concluye con recomendaciones sobre la necesidad de aumentar el
volumen de inversiones de capital de riesgo en proyectos de alta tecnología
con un énfasis en el complejo industrial de defensa, la esfera de TI y la
construcción, entre otras.
Palabras clave: emprendimiento de riesgo; negocios e inversión;
innovación y regulación estatal; startup; gestión de
riesgos.
Introduction
Creation of a favorable investment climate is one of the main means
of ensuring the improvement of quality indicators of the economy of any
country. In the conditions of economic transformations, the eectiveness
of the venture nancing system is a signicant prerequisite for accelerating
the pace of economic growth, transitioning to an investment-innovation
model of economic development and increasing its competitiveness. It
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Vol. 40 Nº 74 (2022): 63-90
is important to develop the toolset of venture nancing, optimize the
innovative infrastructure and create institutional conditions to ensure the
eective functioning of venture funds. Determining eective areas of venture
nancing and creating favorable conditions for attracting investments will
ensure the development of high-tech production, will contribute to the
provision of high-quality and aordable public services to citizens.
The approaches to the formation and implementation of the state
innovation policy that have been in eect in recent years have proven to be
unable to raise Ukraine to a higher level, and therefore require fundamental
changes. Previous attempts to form a state policy to support innovation
in Ukraine through selective assistance in the development of certain
industries, sub-industry and projects had a limited positive impact.
Approaches that are based on the determination of industry priorities
do not lend themselves well to strategic planning, since innovation is a
dicult to predict process. At the same time, priority in the use of available
resources was given to current tasks, and not to the development of
innovative infrastructure, which would have a much greater and long-term
eect. In addition, the determination of industry priorities can become the
object of inuence of current interests, which will lead to the distortion
of public policy, and benets and other preferences for such support can
become a source of abuse.
The current state of innovative activity is partly caused by the lack of
a strategic vision and consistent state policy regarding the transition of
Ukraine to an innovative path of development, the formation of a national
innovation ecosystem that would ensure its implementation and increase
the development of innovative culture in the state, using, in addition to
nancial, other mechanisms for the development of innovative activity.
Despite the presence of individual elements, there is no integrated national
innovation system, the purpose of which is to create innovative products
(processes) and their quick introduction to the market (implementation).
The formation of the innovation ecosystem, which took place in Ukraine
before the military aggression at a rapid pace, when new start-up accelerators
and business incubators appeared in the country, the amount of funding for
start-ups increased, the market for venture nancing developed, and the
state supported innovative business, from March 2022 year slowed down
signicantly. It is quite logical that in the II quarter of 2022, activity in the
eld of deals in Europe may decrease somewhat due to the war in Ukraine,
combined with the growth of ination rates and interest rates. Despite
the fact that there is a signicant amount of cash reserves in the market,
venture capitalists may refrain from making investments in the near term,
given the level of uncertainty.
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
Thus, global events of a global scale - COVID-19, the war in Ukraine,
have made adjustments to the venture business as well, and for venture
investors, the vector of interest has shifted towards environmental, social
and corporate governance and electronic commerce.
Today, a number of factors act as an obstacle to the involvement of
venture business in the development of entrepreneurship, namely: military
actions on the territory of Ukraine, economic and political instability,
the lack of an eective legal framework regulating the functioning of
venture nancing, the lack of interest of the state in the development of
small and medium-sized innovative entrepreneurship, small the share of
domestic venture capital compared to foreign venture capital, the lack of
an institutional environment for venture nancing, the lack of economic
and tax incentives from the state to attract funds to science-intensive
production, etc. (Gontareva and Cherednyk, 2018).
It is appropriate to note that the world economy, which has not yet
recovered from the consequences of the pandemic, is also feeling the
consequences of the war caused by Russia on the territory of Ukraine,
in particular the threat of a food crisis. In today’s conditions of constant
changes, it is impossible to be limited only to long-known, time-tested
economic mechanisms, and to respond promptly and adequately to relevant
crisis phenomena.
All over the world, in connection with the emergence of large companies
and new and promising business ideas, venture capital investment is a
protable direction chosen by countries with developed economies. Despite
the existence of a system of generally recognized procedures, generalized
practices and recommendations of the UN for building a venture nancing
industry, the creation of an eective national venture industry depends on
the optimal use of a number of factors and features of the country’s national
economic potential.
It should be emphasized that the mechanical transfer of positive foreign
experience to Ukraine is impossible due to sometimes signicant dierences
in business conditions, regulatory and legal framework, socio-cultural
environment and the state of the country’s economy. At the same time, it
should not be denied that although Ukraine lags behind in the development
of venture capital investment, the globalization of the economy and the
development of information technologies, as well as the proactive steps of
the state itself, can speed up these processes.
Currently, Ukraine lags far behind countries with a developed innovation
ecosystem. There is an understanding that the development of startups
requires a signicant inux of special investments, taking into account the
high level of risks inherent in innovative activities. Venture investment
mechanisms have long been developed in the world, which are in the stage
of formation in Ukraine (Hrebennyk et al., 2021).
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The system of attracting investments for the development of startups
in our country requires careful analysis and study, which determines the
relevance of the research topic. After all, in the conditions of the nancial
and economic crisis in Ukraine, the involvement of venture business
can become a catalyst for the development of innovative processes and
knowledge-intensive production.
1. Methodology of the study
The work uses a set of methods and approaches, which made it possible
to realize the conceptual unity of the research. Systemic and structural
methods were used to reveal the essence of venture nancing as a tool
for stimulating innovation processes. With the help of comparative and
factor methods, the experience of the development of the venture nancing
system in countries with developed and transformational economies is
summarized and systematized.
The methods of scientic abstraction and synthesis were applied
in determining the priority areas of nancial policy in relation to the
development of the national innovation system. The information base of
the study consists of legislative and regulatory acts on venture nancing,
statistical and analytical materials of the Ministry of Finance, the Ministry
of Economic Development, Trade and Agriculture, the State Statistics
Service, the State Treasury Service, relevant monographs, scientic articles
by scientists.
2. Analysis of recent research
Investment activity is the object of research by many scientists. Among
the scientists who researched the mechanisms of venture nancing,
the scientic works of such scientists as M. Homon (Homon, 2020), O.
Kuzmin (Kuzmin and Lytvyn, 2019), I. Lyakh (Lyakh, 2015), N. Kraus,
O. Shevchenko (Kraus and Shevchenko, 2013), A. Poklonskyi, O. Poklonska
(Poklonskyi et al., 2020), N. Martynovych, P. Leshenko (Martynovych and
Leshenko, 2022) and others.
Despite the large number of scientic works devoted to these issues, the
theoretical and applied aspects of solving the problem of attracting venture
business and its formation in the conditions of the global market, taking
into account national characteristics, remain insuciently disclosed. The
specied circumstances determined the choice of the research topic, its
focus and content.
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
The purpose of this article is to study the theoretical and methodological
foundations of venture investing and, using advanced foreign experience,
to determine ways to improve venture entrepreneurship in Ukraine in
today’s conditions.
3. Results and discussion
3.1. Forms and methods of state support for venture capital
business
The state acts as an organizer of the economic and legal space, the
main purpose of which is to form a system of priorities and directions of
economic development, create conditions for investment activity, and
ensure the competitive advantages of the national economy. The formation
and development of venture business should be facilitated by state policy,
which should be based on the principles of long-term and economic interest
in increasing the eciency of management and the stability of legislation.
The state uses a whole arsenal of tools, levers and other means of
inuencing the innovative development of the country. Their set changes
and improves depending on the chosen strategy of the state’s innovation
policy, the model of venture nancing, the state of society and governing
bodies. In a broad sense, the methods of state regulation of the innovation
process are certain actions, starting with forecasting and planning and
ending with decision-making on transformation, improvement of the
functioning of innovation processes and the economy in general.
Venture capital investment is the investment of capital in start-ups,
that is, in enterprises that are just beginning to develop, in order to receive
dividends. However, such capital investments are risky because: they are
aimed at promising beginners who have the opportunity to potentially
increase the invested funds, they do not yet have income or a dened client
base; investors are not able to quickly return their nances, as making
venture capital investments requires a long time.
Currently, there are the following models of venture capital investment:
investments by venture capital rms, investments by «business angels» and
their associations, investments by non-nancial corporations, investments
by banks, investments with state participation (funds of funds).
The fundamental dierences between these models are: dierentiation
of the goals of venture investors; their use of various organizational and legal
forms of business; specic decision-making mechanisms and investment
management; dierent levels of responsibility for investment results.
Forms (individual entrepreneurship, partnership, corporation, limited
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liability company) and models of venture investment are not static, but are
in the process of constant changes, but the main thing is the existence at
the macroeconomic level of a stable positive correlation between venture
investments and the productivity of production factors (as a result of
innovation), and therefore economic growth (Pylypenko, 2014).
Venture capital is risk capital that is invested in the shares of new and
fast-growing companies to obtain large prots after listing the shares of
these companies on the stock exchange. Venture investments exist to
support the development of a young business, as a result of which the
investor becomes its shareholder.
Venture capital can be characterized as direct long-term investments
in high-tech enterprises (projects) at the early stages of development or
at the stage of expansion, which have the potential for growth and are
characterized by a high degree of risk, potentially high protability, involve
the investment of not only nancial funds, but also certain knowledge
and experience venture investors in the eld of marketing, strategic and
nancial management.
Recipients of venture capital are venture capital rms that are not
obliged to pay interest or return the received sums. The investor’s interest
is satised by the acquisition of rights to all innovations and prot from the
implementation of scientic and technical developments.
It must be stated that today the development of Ukrainian venture
entrepreneurship is hindered by nancial factors, which is primarily due
to a lack of funds. There are no mechanisms for attracting venture capital,
attracting public savings for innovative activities, unresolved nancial and
credit issues regarding small businesses (including lack of access to credit
resources due to high interest rates), and mechanisms for insurance of
innovative risks have not been developed. The share of funding from the
state budget is extremely low.
As the experience of developed countries shows, venture business is
impossible without a developed stock market, since venture nancing is not
aimed at obtaining a certain percentage of invested capital, but at increasing
the market value of venture companies where the venture investor becomes
a co-owner. In addition, in order to ensure the proper functioning of
innovative institutes, the appropriate development of the banking system,
insurance market, pension funds, etc. should be ensured.
It is appropriate to note that the mission of generators of high
technologies and innovative products should be performed by the nancial
mechanism of venture investment. In order to actively develop and operate
the nancial mechanism, appropriate conditions should be created at the
state administration level, where the key issue is the eective combination
of the goals of the state and venture entrepreneurs. The main tasks of the
state in this eld should be:
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
• formation of a favorable investment climate and tax regime for both
domestic and foreign venture investors;
• development and implementation of new organizational and legal
forms of venture investing;
• creation of conditions for the development of infrastructural units of
the venture ecosystem (technology parks, incubators, accelerators,
centers of entrepreneurial activity, stock exchanges);
• formation of conditions for the development of innovative
entrepreneurship in the real sector of the economy, as well as in the
scientic and technical sphere;
• creation of eective mechanisms of commercialization of the results
of scientic, technical and innovative activities;
• increasing the nancial literacy of the population and its investment
activity.
(Own creation).
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The proposed scheme clearly shows the direct inuence of the state
on the formation of the main priorities for the development of venture
entrepreneurship. The latter are formed in accordance with economic and
social development strategies and the Laws of Ukraine «On Innovative
Activity», «On Priority Areas of Innovative Activity in Ukraine» and include
budget nancing of the innovation sphere, improvement of innovative
infrastructure, development of venture business, etc.
Forms and methods of state support for venture activity can be divided
into two groups: direct and indirect. State participation in the nancing of
venture projects within the framework of approved state programs or state
venture funds or through the provision of state loans to venture companies
and small innovative rms belongs to direct state support measures for
venture entrepreneurship.
In many cases, the direct participation of the state in venture capital
is always the optimal solution. Thus, with insucient processing, such
schemes can lead to unsuccessful investments and large losses for the
state. Government programs can be used to nance or support non-viable
projects or enterprises that cannot attract private capital because they are
unsuccessful objects for investment.
Indirect measures include improving the system of tax benets and
preferences, establishing special tax regimes for venture capital entities,
expanding the range of venture investors (granting the right to invest
in venture capital to institutions such as pension funds or insurance
companies), guaranteeing loans or part of losses from venture capital
investments.
Often, the optimal approach is to improve the macroeconomic and legal
environment to overcome some of the nancial barriers to making high-
risk investments. The importance of supporting venture business in today’s
conditions is undeniable, because supporting small companies reduces the
overall level of unemployment in the country, creates new technologies that
contribute to the long-term growth of the national economy.
3.2. The current state of venture entrepreneurship in Ukraine
Since the beginning of the military invasion of Ukraine, almost all
companies have needed nancial support. Only after a certain time, the
demand on the market recovered by an average of 40-50 %. A somewhat
better situation was observed in the eld of education, where a drop
in demand by only 10-20 % was recorded. The eects of the war were
immediately felt by venture capital funds that had portfolio companies
related to logistics, physical goods and movement. According to separate
data, at the beginning of the war, only 24.3 % of Ukrainian start-ups
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
continued their work and 16.7% of businesses had security for 3-6 months.
Others are in a more critical situation, which has put them in survival mode
(Startup voice: results of the survey of the startup ecosystem of Ukraine,
n/y).
Therefore, the main task of venture capital funds is to urgently help
portfolio companies. In the rst days of the war, investors and CEOs of
startups were concerned with the physical safety of all employees and the
provision of housing. Startups that worked in oces quickly decided the
format in which they should function in the future: moving to another city,
switching to a remote work format or creating a hybrid model.
It is also obvious that after the invasion of Ukraine, most domestic
companies that worked in Russia left there. This is absolutely the right thing
to do, but there was a question about entering new markets, involvement
of specialists with relevant experience, clear planning and prioritization of
directions.
In our opinion, in the near future, we should expect the emergence of
startups in Ukraine in such areas as defense, construction, cyber security,
mental health and medicine. And here, without a doubt, separate support
from the state will be needed.
By the way, defense startups are already serving our defenders. For
example, the Ukrainian company Culver Aviation develops its own drones
and recently transferred part of its eet of unmanned aerial vehicles to the
Armed Forces of Ukraine. Instead, the Ukrainian start-up Delfast sent the
army electric bikes of its own production, which carry containers of NLAW
missiles.
The cryptocurrency market and everything related to it should also be
relevant. During the war, a large share of donations was made through this
channel. According to ocial data, in just two weeks, the Aid for Ukraine
project collected more than $71 million of cryptocurrency. It is also worth
pointing out the trend of p2p transfers abroad and within the country. So,
according to some forecasts, the demand for this service will only grow and
by 2030 will reach $9,097.06 billion (P2P-payment-market).
There have been changes in the eld of transport, because the shortage
of fuel is pushing for decisive changes - the transition to electric vehicles. Oil
and gas are exhaustible resources, but their alternative options are actively
being developed in advanced countries. According to some estimates, about
6.7 million units of electric vehicles were sold in 2021, which is double the
number of the previous year (Carlier, 2022).
The domestic government loan bond market of Ukraine, which continues
to grow, needs special attention. On April 27, 2022, about 1,000 legal
entities and individuals received UAH 3.3 billion from the repayment of
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the rst issue of military bonds (P2P-payment-market). Therefore, there is
a high probability that in the near future, investments in various securities
will gain more popularity in Ukraine.
If we talk about the specic steps of startups and funds, founders should
optimize the operational eciency of their business based on statistical
cash ow forecasting methods, and funds should evaluate and analyze
each product of the company in order to maintain or increase its return on
investment. At the same time, it is important to prioritize work concepts
in order to concentrate the company’s limited resources only on protable
areas. At the same time, the funds can contribute to the construction of
a long-term marketing strategy for startups entering or expanding into
Western markets.
Currently, entrepreneurs have a chance to replenish the team with highly
professional personnel and provide work for Ukrainians who lost it due to
the war. In general, business processes should be restructured in such a
way as to attract funds from Western investors, who can play a signicant
role in the recovery of business in Ukraine.
Currently, there are many problems in Ukraine regarding venture
investing: martial law; crisis phenomena and instability of the social
and political situation; low level of development of IT entrepreneurship;
imperfection of the legislative sphere and insecurity of investors; public
distrust and insucient government support for joint investment
institutions; lack of conditions for the activity of investment funds,
a low share of innovative development of enterprises; low level of
commercialization of the results of scientic research and development;
imperfect startup development procedure; the demand for innovations has
not been formed and the market for innovative products and infrastructure
is imperfect.
However, it makes no sense to talk about any generalized statistics
regarding the size and conditions of nancing since the beginning of the
war, because most investors are not yet ready to consider new projects in
Ukraine, and the investment leaders before the war, real estate and the
agricultural sector, have now lost their positions and almost do not attract
new funds. IT is not the only sector that will continue to be actively invested
in under almost the same conditions (Zalevska, 2022).
According to the calculations of AVentures Capital, 2021 was a record
year for the Ukrainian IT industry in terms of the amount of capital raised
(venture and private). Compared to 2020, it increased by 46% to $832
million. Startups at the early stages (Seed – Series A) attracted a record
amount of investment - $242 million. The number of exits per year is also
a record - 28 (Sudolsky, 2022). Before the start of the military invasion
on the territory of Ukraine, the country rather unexpectedly held the rst
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
positions in Europe in the eld of training IT specialists, as well as in the
volume of IT services exports, having more than 110 R&D centers of well-
known international companies, and 21 companies of Ukrainian origin
with development oces Ukraine, which is included in the list of Global
Outsourcing 100» (Vasyuk, 2020).
The industry that shows the most activity and scalability is «Software
& Data / Software and data». It has more than 24,000 startups, of which
255 are unicorns, that is, companies that have reached a capitalization of
$1 billion in a short period of time. The next most active industry is Social
& Leisure Technology, with more than 8,000 startups but a relatively small
number of unicorns at 26. On the other hand, the e-commerce and retail
technology industry has fewer startups represented (less than 7,000), but
the second highest level of scalability – 119 unicorns (Venture Pulse: Global
Analysis of Venture Funding. KPMG International, n/y).
The market of venture investments in Ukraine is only developing, but
it is already showing good results. Startups Gitlab, Grammarly, People.
ai, Ajax Systems have found their place at the international level, and
according to the forecasts of specialists, the venture investment market in
Ukraine will grow at least two to three times by 2023. It is about investing
in foreign companies (Filippov, 2020).
Despite the war, there was almost no decline in capital investments in
the IT sector and startups. The relocation of key specialists of IT teams to
safe regions of the country makes it possible not to lose the pace of work.
Therefore, investors willingly invest in our companies, and venture capital
funds easily raise funds to nance Ukrainian startups. Although martial law
and military mobilization were introduced in the country, businesses and
team members were relocated, the IT industry in the rst quarter of 2022
brought the state a record $2 billion in export earnings. This is 500 million
dollars more than in the corresponding period of the last peaceful year.
In the new conditions, the industry managed to reformat quickly thanks
to anti-crisis business plans. Most companies have maintained the volume
of contracts and customers. Thanks to this, the segment has an appropriate
level of nancial stability. At the same time, the number of industry
specialists increased by 41,000 to 285,000 (Zalevska, 2022). Of course,
such indicators attract potential investors, so the Ukrainian IT business can
continue to count on funds from investors and venture capital funds.
Unfortunately, the Ukrainian Startup Fund (USF) has suspended
nancing of new projects. This is explained by the fact that a large number
of founders of startups protect our Ukraine as part of the army, ground
defense and IT army of Ukraine. However, funding will be restored
immediately after the victory, the foundation promises (Zalevska, 2022).
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In general, we can state that the IT sector has become the locomotive on
which Ukraine entered the world venture market, but the country has a rich
potential for the development of innovations in other areas of the economy.
This requires a modern venture investment system, which is developed on
the basis of modern practices and is fully integrated into the global system.
Another promising sector for attracting investments is the agricultural
sector. But here everything is not so optimistic. The war on the territory
of the country carries many risks for agricultural producers. Therefore,
investors are more focused on pessimistic forecasts: in particular, it
should be expected that in 2022, national agricultural investors will
direct resources mainly to the preservation of existing capacities located
in controlled territories. If the risks of investors caused by the objective
situation in Ukraine will signicantly decrease or disappear, investment
processes in agriculture will quickly intensify.
However, there are investment options in the agricultural sector. Some
experts are convinced that the strongest real estate is land, and currently
there is a unique opportunity to invest in fertile Ukrainian land, because its
prices have not yet increased to 70%, as it is planned after January 1, 2024.
Such an asset is the least prone to crises and gives a prot of 8% per annum.
At the same time, it must be stated that such investment is currently not
available for foreigners, and Ukrainian investors do not have sucient
funds. And in general, all these processes are frozen (Zalevska, 2022).
Currently, we can cite other examples of venture capital investment.
Thus, Glovo, which invests in the Ukrainian delivery market, plans to
continue developing its own innovative projects: last-mile b2b delivery,
development of the Q-Commerce vertical and dark stores, as well as Cook
Room (cloud kitchens). Mastercard in Ukraine focused on investments
in projects that will help Ukrainians. The company continues to invest in
innovative technologies and experience for the development of the digital
economy and further growth of the country.
According to some analysts, after the war, Ukraine will need businesses
in the following areas: logistics (creating railway connections with European
capitals); processing of agricultural products; construction; services; Light
industry; creation of new technologies (in particular, in combination with
the defense industry); a new system of education and training of specialists;
development of energy eciency (Business and investment in war
conditions: how Ukrainian entrepreneurs are looking for new opportunities
for development).
Also, in view of the importance of the prospective development of
the domestic production of weapons and military equipment in order to
ensure the territorial integrity and independence of Ukraine, to minimize
threats to national security, venture capital, subject to state support and the
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appropriate defense industry policy, can become a locomotive of innovative
development of the defense industry, which will give impetus to the active
movement innovative «center of attraction» for civilian sectors of the
economy, while ensuring the rapid development of high-tech projects.
To restore the economy, large-scale deregulation, investment, large labor
resources, extraordinary eorts of the business community are needed.
But, according to business, eective post-war recovery of the country is
possible only if appropriate state policy is implemented, including a liberal
innovative economy (creating conditions for fair competition and business
cooperation, attracting investments and forming a high level of trust in the
state; developing human potential; stimulating development innovation
and modernization (including digitization) of the economy, barrier-free
movement of capital and anticipatory development (recognition) of virtual
assets, etc. (Dligach, 2022).
In our opinion, for the inow of investments to Ukraine, it is necessary
to introduce risk insurance, in particular, insurance against war. There are
already international organizations that are ready to launch such insurance
programs for Ukraine. Important steps under such conditions are: changing
the attitude of the authorities at all levels towards business, faster decision-
making, issuing the necessary permits, changing the tax system, opening
a business, access to quick funds, etc. (Business and investment in war
conditions: how Ukrainian entrepreneurs are looking for new opportunities
for development).
In general, for the sustainable development of the state, it is necessary
to provide favorable conditions for the formation and operation of
innovatively active enterprises, the development of the national innovation
ecosystem, and the attraction of domestic and foreign investors. At all
levels, investment priorities should be reassessed taking into account ESG
sustainability criteria, i.e. environmental, social and governance criteria of
corporate governance.
3.3. Organizational and economic measures of management of
innovative activities in the eld of venture entrepreneurship
Innovations are important for the formation of a new economy,
which is explained by the action of the fundamental factors of economic
transformation. The eld of venture entrepreneurship is no exception in
this regard. Such factors act in dierent ways. Some of them put pressure
on subjects of economic activity and speed up innovation processes,
while others open more and more opportunities for the introduction of
innovations. Also, in the conditions of war on the territory of Ukraine, there
is an increase in uncertainty and turbulence in the national economy, which
actualizes the feasibility of introducing innovations in all spheres of life, in
particular, the development of venture business.
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The active innovation policy of the state, which covers the training of
scientic personnel, the introduction of innovative business development
programs, cooperation between enterprises and research institutions in
all industrialized countries of the world, has become a prerequisite for
their long-term economic growth and stable social well-being. The basis
of such a policy at the state level is the development of a national strategy
for technological modernization, the concentration of resources in selected
areas and the formation of competitive advantages of small enterprises in
the relevant areas and the realization of these advantages in the markets
(Kraus and Shevchenko, 2013).
Managing the innovative development of business entities, taking into
account the current geopolitical crisis, the state of the economy and science,
is a dicult task, but moving forward is extremely necessary, because the
creation of a favorable regulatory environment for venture entrepreneurship
is one of the dening tools for restoring dynamic economic growth,
modernizing the national economy and creating a basis for improving the
welfare of the population of Ukraine.
In particular, an important issue in the development of innovative
activities of enterprises is the determination of sources of nancing of
innovative projects. Far from all domestic enterprises have the opportunity
to implement innovations in a sucient amount with their own funds.
The amount of funding from the state budget is also limited, and support
from foreign investors and international grants are currently insucient
(Homon, 2020).
Currently, the venture capital market in Ukraine is narrow. Investors
explain this trend with the following factors: the absence of an eective
mechanism of state guarantees for the protection of investments; existence
of pressure on business; high tax rates; improper methods of legal
protection: ineciency of judicial and law enforcement systems (fe3 - is
there a future?, 2020).
In Ukraine, joint investment institutions require development support
from the state, namely a reduction in the tax burden (the tax rate on
investment income is 9%, in contrast to Estonia - 0%, Lithuania - 0%,
Slovakia - 0%, the Czech Republic - 5%. That is why it is more protable
for venture investors to create funds in foreign countries, and for startups
to go to these countries, where the investment climate, eective investor
protection mechanisms and jurisdictions are more favorable.
As experts rightly emphasize, it is important to create a so-called
oshore zone for startups. Some states also provide them with a tax holiday:
the minimum tax rate works for the rst three years after the company is
established. Other mechanisms are possible, but innovative business needs
them very much. In addition, it is necessary to leave the companies alone,
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to stop the constant raids of law enforcement agencies (Ukraine needs
to create an oshore zone for startups - the executive director of UVCA,
2017). After all, the main advantage of venture funds, unlike an investment
company, is the exemption from income tax. The income itself is not
subject to taxation, it is only paid out by the participants of the fund after
the completion of its activities.
Innovative development requires attracting signicant resources,
especially for small and medium-sized enterprises, which, having innovative
ideas, are mostly unable to implement them. An important issue in the
development of innovative activities of enterprises is the determination
of sources of nancing of innovative projects. Far from all domestic
enterprises have the opportunity to implement innovations in a sucient
amount with their own funds. The amount of funding from the state budget
is also limited, and support from foreign investors and international grants
are currently insucient (Homon, 2020).
Preservation of the scientic, technical and innovative potential
available in Ukraine is possible only with systemic support for innovations.
At the same time, due to a number of factors, the main of which is the
military aggression of the Russian Federation, the country does not have
the nancial resources to ensure full-scale development of an innovative
type. Under such conditions, it is possible to preserve and increase the
innovative potential only at the expense of nancial and credit support
of the innovative sector of the economy. It is necessary to select basic
technologies, enterprises, research institutes, educational institutions that
determine innovative development and ensure the competitiveness of the
state, and create favorable nancial conditions for them, adequate to the
tasks.
In our opinion, today the main factors contributing to the development
of venture business of an innovative type are: the presence of a scientic
and educational base and a powerful research sector, scientic schools;
development of nancial institutions and markets of the insurance and
pension sectors; availability of the stock market; political and macroeconomic
stability, sustainable economic growth; stable demand from the state and
the private sector for scientic research and development; availability of
free capital (Venture Pulse: Global Analysis of Venture Funding, n/y).
World practice shows that venture nancing is carried out in various
forms. When considering the forms of venture capital as one of the
components of the innovation process in the conditions of modernization
of the economy, it should be borne in mind that due to the national
peculiarities of the legislative regulation of the nancial sphere of dierent
countries, the structure of venture capital diers. Sources of venture capital
formation have signicant regional dierences and are determined by
historically formed practices.
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In our opinion, venture funds are the most optimal mechanism for
the formation of venture capital, as they accumulate the main volumes
of potential venture investments; through them, the most optimal
connection of venture capital with highly qualied nancial and innovative
management is carried out; with the help of funds, the state can actively act,
which uses the advantages of venture capital to solve priority tasks; venture
funds contribute to strengthening the internationalization of the venture
capital market.
3.4. Ways to activate venture capital investment in the
innovation sphere in Ukraine, taking into account advanced
foreign experience
Venture investment and venture funds are an indispensable component
of the development of an innovative economy. Innovations are one of the
priority directions of state policy in most developed countries because
they are the basis of national independence, security and economic
development. State regulation of venture activity is an integral component
of venture investing and the development of the venture industry in Ukraine
(Kunitsyn, 2014).
Among the reasons for the need for state regulation of venture investments,
O. Kunitsyn rightly attributes: strengthening of monopolistic tendencies in
the nancial market; insucient funds for initial entrepreneurs; society’s
need for technical innovations; ght against the tinization of the economy;
protecting national interests and increasing the nancial and economic
security of the state (Kunitsyn, 2014).
If we consider the global trends in the direction of venture capital by
economic sector, then, analyzing the quarterly reports of KPMG Enterprise
Venture Pulse (Venture Pulse: Global Analysis of Venture Funding. KPMG
International, n/y), it can be emphasized that software remains the
unchanging leader, the share of which in recent years accounts for 34%
of all venture investments. Promising directions for venture investments
today are biotechnology and the pharmaceutical industry (10%), leasing
services (9%), consumer goods and tourism business (5%), the IT industry,
energy saving systems, the media sphere, medical services and services, etc.
(3 4%).
Compared to others, venture business in Ukraine is a relatively new
direction of economic development, the formation of its institutions began
in the last decade of the 20th century. Moreover, the rst steps regarding
the use of venture business principles were not carried out in the eld of
nancing innovative projects, but during economic reforms during the
transition to new organizational and legal forms of entrepreneurial activity.
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Today, Ukraine’s share in the global venture investment market remains
insignicant - about 0.1%. Various sources of venture capital nancing
have become widespread in Europe and the United States. These are, rst
of all, investment funds, which have about 67 % of the venture market,
and corporate nancing - about 30%. For Ukraine, the main ones in this
direction are joint investment institutions operating on the basis of the
Law of Ukraine «About joint investment institutions (equity and corporate
investment funds)» (About Joint Investment Institutions (Equity And
Corporate Investment Funds): Law Of Ukraine, 2001). They represent
investment funds that accumulate funds of individual investors with the aim
of obtaining prot by investing these funds in assets and are divided into
several types, among which there are joint investment venture institutions.
The main factors contributing to the development of venture business
are: the presence of a scientic and educational base and a powerful research
sector, scientic schools; development of nancial institutions and markets
of the insurance and pension sectors; availability of the stock market;
political and macroeconomic stability, sustainable economic growth; stable
demand from the state and the private sector for scientic research and
development; availability of free capital (Venture Pulse: Global Analysis
of Venture Funding, n/y). In Ukraine, most of the mentioned conditions
are contradictory, since today the venture business is only at an early stage
of development, having certain features and specic features, which is
determined by the political and economic situation (Mordan, 2018).
As experts rightly point out, the Ukrainian economy has been in need
of modernization for a long time by removing bureaucratic barriers and
making maximum use of available advanced foreign experience. However,
in order to implement something as eectively as possible, the country
needs a strategy, transparency, interaction, awareness of responsibility at
all levels (Business and Investments in War Conditions: How Ukrainian
Entrepreneurs Search for New Opportunities for Development).
Globalization and modern communication technologies create
opportunities for the existence and development of successful innovative
enterprises and clusters, even despite the general technological
backwardness, low purchasing power of consumers and territorial
remoteness, through inclusion in international chains of creation of added
value (value). This will have a positive impact on the development of the
vast majority of economic sectors and will provide additional opportunities
for domestic small and medium-sized enterprises.
In addition, innovations are capable of scaling, which is best realized
on the global market, in which the share of the domestic sector is currently
0.12% (Strategy for the development of the sphere of innovative activity
for the period until 2030, Order of the Cabinet of Ministers of Ukraine No.
526, 2019).
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It is worth emphasizing that the legislative system of any developed
country does not contain a separate normative legal act on venture activity.
Venture investing is carried out within the framework of general legal
norms and uses legal forms and schemes regulated by the legislation on
the rules of corporate and investment activity; in most developed countries,
legislative acts concerning the forms and methods of venture investing
are adopted with the aim of stimulating this type of activity by providing
various tax benets, deferrals and prerogatives to investors, mainly
employed in the eld of high technologies; the need to develop legislative
norms that regulate venture investing is recognized as appropriate if the
state authorities are interested in the participation of venture investors in
the intensive development of economic entities in critical directions from
the point of view of state priorities (Lepylo, 2012).
The modern Ukrainian state has very limited nancial and institutional
capacity. Therefore, it is advisable to focus available resources and
potential on supporting scientic research, which is one of the foundations
of innovation potential, and creating an eective infrastructure that will
facilitate the transformation of research results into a product suitable for
commercialization. In order to solve the task of transition to innovative
growth in the Strategy for the Development of the Sphere of Innovative
Activity for the Period Until 2030, among the wide variety of possible tools,
those are oered which year No. 526): best correspond to overcoming the
obstacles that most hinder the innovation process in Ukraine; require the
least budget expenditures and scal resources, but at the same time are able
to bring tangible results for minimal investments; are the least vulnerable
to corruption and other abuses.
It is also necessary to review and implement schemes for tax incentives
for innovative activities, to conduct a favorable state policy for venture
nancing; provide tax benets only to those venture funds that nance
projects that correspond to the priority directions and strategy of innovative
development of the state.
At various stages of the innovation process, the following problems
were identied, which should be solved with the help of state policy tools,
in particular at the stage of innovation creation: insucient funding, in
particular state funding; lack of necessary information about the market
prospects of the proposed idea and knowledge and advisory support for
the project from the idea to the commercialization stage; insucient use
by scientists and small and medium-sized businesses of opportunities to
participate in international programs; lack of established communications
between scientists and business representatives who are interested in the
development of innovations, both for the needs of business in innovation,
and for data about new and improved technological solutions that can be
used in production insucient promotion and dissemination of information
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about positive examples of transforming an idea into an innovative one
product; lack of reliable forecasting of trends and studies of the inuence
of instruments of state regulation on the innovative development of the
economy.
The problems of the functioning of the national innovation
ecosystem at the stage of introducing innovations through the creation
of a specialized small innovative enterprise - startup N. Zakharchenko
include: burdensome regulation, in particular complicated access to the
labor market for foreigners and an excessively complicated process of
liquidation of the enterprise, which is extremely relevant for startups, since
innovative activity is a high-risk type of business and some startups turn
out to be unsuccessful; high level of taxes (primarily on wages and prots
of enterprises); lack of necessary knowledge and skills for conducting
business activities; large-scale expenses for a newly formed enterprise for
renting premises and equipment, paying for third-party services (primarily
accounting); insucient development of venture nancing in Ukraine and
problems of legal protection of property of foreign investors; the absence
or limited eciency of innovative infrastructure, which should contribute
to the development of innovative entrepreneurship (Zakharchenko, 2020).
There are also a number of problems that concern all stages of the
transformation of an idea into an innovative product, in particular the
problem of the departure of qualied personnel, scientists, inventors, and
entrepreneurs abroad, the main reasons for which are: better opportunities
for the implementation of ideas abroad (primarily access to nancing,
legal protection, proximity to sales markets, lower cost of doing business);
higher quality of life (security and rule of law, education and health care,
social protection in case of need, infrastructure, ecology, etc.); a creative
and entrepreneurial environment created in the world’s best centers of
innovation.
Financial incentives for investing in venture funds, small and medium-
sized innovative rms can be introduced by: reducing the state’s venture
risks of private investors, including through state guarantees for loans to
venture funds or new small companies, and promoting the diversication
of capital of private venture funds through the participation of the state
venture capital fund in specially selected projects; implementation and
development of the mechanism of state insurance of loans provided
by market nancial and credit institutions for the implementation of
innovative projects.
Perhaps the most important condition is the promotion of the
development of innovative infrastructure, important elements of which
are technology parks, business incubators, technology transfer centers
and, of course, venture funds; holding innovative competitions, expert
councils, venture fairs at the national and regional level (Lyakh, 2015).
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The combination of all elements of the innovative infrastructure into an
information network will allow interaction between business and capital,
project authors and potential investors, will facilitate the establishment of
partnership relations between them, obtain comprehensive information
about the latest trends and prospects of the venture industry, and
demonstrate the possibilities of innovative business.
It should also be emphasized that almost no marketing research is
conducted in the innovative eld, which is caused by deciencies in the
intellectual property protection system. The development of venture
entrepreneurship is hindered by an imperfect information base, because in
order to make a decision to invest in the activities of a high-tech company,
venture investors must have enough information about its innovative
potential and development prospects (Polishchuk and Polishchuk, 2017).
In addition, the development of venture investments is negatively aected
by the lack of highly qualied specialists in the innovation eld, who would
be able to provide eective management of both venture business and all
other subjects of innovative entrepreneurship (Lyakh, 2015).
Prospects in today’s conditions of martial law in Ukraine can be seen in
preferential taxation, which is not related to direct budget expenditures, but
to deductions from revenues. In our opinion, the tax policy in the eld of
promoting the development of venture entrepreneurship should be carried
out in the direction of: inuence on the production spheres of the material
enterprise and commercial structures and banks in order to increase
the volume of investment, which is directed to innovative processes, in
particular, to venture enterprises; acceleration of production development
and renewal of xed capital on a modern technical basis; stimulation of
scientic activity.
So, a comparative analysis of the main models of venture capital
investment made it possible to single out the following advantages, which
are promising for use in Ukraine. In our opinion, these should include:
the active participation of the state in the creation of adequate venture
investment institutions, the formation of material, legal and educational
conditions for the emergence of a sucient number of innovative
companies; availability of state guarantees for venture investors; developed
infrastructure and stock market; adequate legislative regulation of venture
activity, in particular with regard to preferential taxation; availability of
various investment mechanisms; dened methods of insurance of venture
risks; interest of large credit and nancial institutions, corporations in
supporting venture activity.
We believe that the consistent implementation of the mentioned
measures will create favorable conditions for increasing the innovative
activity of state enterprises in all spheres of economic activity, will contribute
to the increase of venture investments, and thereby expand the possibilities
of realizing the innovative potential of the Ukrainian economy.
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In general, it should not be denied that there is a signicant potential for
attracting venture nancing by Ukrainian startups, in particular in the eld
of software development, online services and hardware products.
In order to bring the Ukrainian venture investment market into line
with world trends, advanced foreign practices of developed innovation
ecosystems should be introduced into the Ukrainian environment. For
example, to improve the development of venture capital investment in
Ukraine, the following forms of state instruments, successfully used in
other countries, can be used:
• provide capital to venture capital funds or small companies as a
loan at low interest rates or in the form of direct investments. So,
for example, in Denmark there is a state program VaekstFonden
(Business Development Finance) Loan Program, which provides
state loans;
• provide benets or state guarantees for loans to venture capital
funds and small businesses. In the UK, tax breaks or exemptions are
available through the Enterprise Investment Scheme and Venture
Capital Trusts.
3.5. Legislative perspectives of regulation of venture
entrepreneurship in Ukraine
The weak legislative framework, the instability of the regulatory eld
and the insucient eectiveness of the protection of intellectual property
rights are the primary problems of the development of the venture industry
of Ukraine.
Several years ago, I. Lyakh highlighted the main shortcomings of the
current legislation in the eld of venture business development in Ukraine,
which remain relevant even now: the legal status of venture business entities
is not clearly dened; legislative acts are not suciently interconnected,
and many legal provisions regulating business activities do not correspond
to the real economic situation in the country; there is no legislation that
regulates relations related to the use of scientic discoveries, because patent
and copyright law do not protect the rights of scientists to the fundamental
results of scientic research obtained by them for the rst time; patent law
also needs improvement, so it does not have a clear denition regarding
venture business; necessary changes in the laws on business companies, on
investment activities, on income taxation, in antimonopoly legislation and
others (Lyakh, 2015).
The modern legal framework of Ukraine includes more than 217 thousand
documents, and only 8 documents contain the term «venture fund» (and
all of them refer to securities) (Ocial web portal of the Verkhovna Rada
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of Ukraine, n/y). Also at the current stage, the Concept of the Development
of the National Innovation System (2009–2025) is in eect, one of the
directions of which is to create conditions for investing venture capital in
high-tech innovation projects.
The database contains about 200 specialized legal documents regulating
venture activity in terms of its innovative, investment, scientic and
technical, intellectual components, in addition to certain provisions of
the Constitution of Ukraine, the Economic Code, the Civil Code and the
Concept of the Development of the National Innovation System, which
need improvement, because they have a low eectiveness of inuencing the
development of this activity in Ukraine.
Therefore, we note the blurring and uncertainty of many concepts and the
contradictory nature of certain normative legal documents, which prevent
the formation of a unied base for venture investing in Ukraine. Adoption
of the draft law «On Venture Funds for Innovative Development» or «On
Venture Activity in the Innovative Sector» can be a positive development in
the sector of domestic innovative business.
It is undeniable that the recovery of the economy after the full-scale war
in Ukraine will require nancing, including the widespread involvement of
international capital in individual projects of Ukrainian business. However,
such projects already exist and require urgent nancial support. At the
same time, national legislation limits the provision of such support during
martial law.
Therefore, precisely with the aim of ensuring business nancing during
this period, a group of People’s Deputies of the Verkhovna Rada registered
a draft law on amendments to the Law of Ukraine «On Investment Activity»
on supporting manufacturers and attracting foreign investment during
martial law» No. 7456.
The document provides for ensuring support for the state’s economy in
the conditions of martial law, taking into account the main export groups,
which will allow to support manufacturers and maximize foreign currency
inows to Ukraine, gives certain preferences to foreign investors who,
despite all the risks of war, decide to invest in Ukraine.
According to the current Law of Ukraine «On Investment Activity»,
any investments cannot be made in conditions of a state of emergency or
war, and therefore neither development nor support of production can take
place during such a period.
The war period is the most dicult for the economic and budgetary
sectors, and it is during this period that budgetary and donor support for
the export sectors of the economy should be maximally activated. That is
why the draft law proposes to consider not only the actions of citizens, legal
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entities, but also the state, foreign nancial institutions and international
nancial organizations regarding the implementation of investments as
investment activity. A special investment project is being created for state
support of private business under martial law. This means the possibility of
state support for the preservation of existing industries.
If the business entity was conducting activities and had valid contracts,
it can evacuate (receive free transportation of production facilities, a land
plot on preferential terms for the location of evacuated production outside
the territory of hostilities, etc.); quickly launch new critically important
areas of economic activity. In the event that international partners of the
private sector wish to launch a new joint venture (border transshipment
terminals, elevators, road infrastructure, etc.) that will help in the mobility
and export of Ukrainian products, according to the draft law, the state will
provide a free plot for this, and will ensure the purchase of equipment and
production equipment.
In general, it should be noted that the introduction of relevant changes
to the Law of Ukraine «On Investment Activities» creates only a legal
framework and is not a guarantee of the planned implementation. The full
implementation of such a concept requires attracting funds, which due
to the war are not available in the state budget, as well as conviction in
restoring the evacuated or starting a new business.
At the same time, we consider it urgent to improve the legislation on
venture nancing. The development of the Concept for the development
of the national venture industry should be focused on the formation and
implementation of a unied state policy on the protection of venture
investors, the attraction of investment capital and technologies, the
development and operation of the market for securities and their derivatives,
the circulation of shares on the secondary market, and to facilitate the
adaptation of the national stock market to international standards.
We see the need for a clear legislative denition of the concept of venture
nancing and the principles and mechanisms of its implementation. In
particular, apart from the concept of «venture entrepreneurship», which
is contained in the normative legal acts of Ukraine, there is no denition
of the essence of the functions, principles of activity of venture companies
and funds, etc.
Conclusions
The main part of the scientic article contributed to the formulation of
the following conclusions:
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CUESTIONES POLÍTICAS
Vol. 40 Nº 74 (2022): 63-90
Venture nancing contributes to the creation of new products,
technologies, services or management solutions. Venture capital is one of
the most eective mechanisms for nancing innovation and scientic and
technological progress, and its uniqueness is determined by accompanying
additional services (management, marketing, consulting, etc.).
The state has a special role in stimulating the development of venture
entrepreneurship, which creates appropriate institutional conditions for:
providing venture business with state aid, encouraging the creation of
venture funds, improving the legal framework and tax system in terms of
taxation of venture funds, promoting the development of nancial markets.
It is necessary to develop a strategy to improve the investment climate
and expand venture investing in Ukraine, the main measures of which
should include: revision of the legislative framework, improvement of the
investment climate, and measures to stabilize the economic situation in the
country.
Specialized joint investment institutes, business angels of venture
projects, and crowdfunding are the main tools for nancing venture
business in modern conditions. The spread of venture nancing
technologies, which involve the investment activity of business angels and
the use of crowdfunding, requires the dissemination of information about
their capabilities, the creation of an appropriate legal framework for the
legalization and normal functioning of private venture capital, as well as tax
incentives for individual investors who invest in risky projects.
The main tasks of the state in the eld of venture business in Ukraine
are dened as: development of the innovation ecosystem in accordance
with the leading world trends; improvement of the legislative framework
in order to create a foundation for investors, in particular in the eld of
venture business; formation of a favorable investment climate and tax
regime for both domestic and foreign venture investors; development and
implementation of new organizational and legal forms of venture investing;
creation of conditions for the development of infrastructural units of the
venture ecosystem (technology parks, incubators, accelerators, centers
of entrepreneurial activity, stock exchanges); formation of conditions for
the development of innovative entrepreneurship in the real sector of the
economy, as well as in the scientic and technical sphere; creation of eective
mechanisms of commercialization of the results of scientic, technical and
innovative activities; increasing the nancial literacy of the population and
its investment activity; raising the awareness of potential innovators and
startups about venture investment opportunities in Ukraine; building a
system of protection of intellectual property and protection of the rights of
owners and investors; formation of a modern securities market for startups
going to Initial Public Oering.
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Maryna Tymoshenko, Nataliia Bondarchuk, Iryna Lytvyn, Iuliia Kostynets y Oksana Bieliakova
Prospects of state regulation of venture entrepreneurship in Ukraine
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Esta revista fue editada en formato digital y publicada
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Universidad del Zulia. Maracaibo-Venezuela
Vol.40 Nº 74
