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Cabinet Sets up State Venture Company to Invest in High-Tech

Published: August 15, 2006 (Issue # 1195)


The Cabinet on Thursday approved the creation of a state venture company that is to invest 15 billion rubles ($560 million) in the country’s high-tech sector.

Also known as the “fund of funds,” the Russian Venture Company is set to boost technology investments and diversify the economy away from commodities. The company will create eight to 15 venture funds to be managed by private companies, Economic Development and Trade Minister German Gref told the Cabinet meeting, Interfax reported.

“We aim to attract more than 30 billion rubles ($1.12 billion) to the Russian high-tech sector by the end of 2007,” Gref said.

Russian Venture will be fully established by the end of this year and fund-management companies will be chosen by tenders in early 2007, Gref said.

Lax protection of intellectual property rights, the high risks associated with technology start-ups, and attractive returns from investing in large private companies and the stock market have all served as disincentives to investment in small, fledgling technology firms.

Education and Science Minister Andrei Fursenko told the meeting that the capitalization of venture funds at was pegged 4 billion conditional units in Russia. Conditional units can be interpreted to mean dollars or euros, or the average of the two.

“But only 5 percent of these resources is allocated toward high-tech. This is very small, [and] without government participation this percentage is not going to grow significantly,” Fursenko said, Interfax reported.

Russian Venture — expected to be set up by the end of this year — is an important first step in building a competitive high-tech sector. But Russian Venture will not do the job alone, experts said.

“There’s clearly a need for investment in this sector. It’s a question of doing a lot of things simultaneously,” said Ulf Persson, co-founder and Managing Partner of Mint Capital.

By definition, start-ups constitute risky investment because, unlike larger private companies, they have not proven their profitability. Gref said world-famous brands, including Microsoft and Cisco, emerged as a result of venture capital funding. Only a few technology start-ups are destined to become global powerhouses, however.

“Without government support, venture capital investment [in technology start-ups] will emerge in 10 years at best,” said Mikhail Gamzin, managing partner of Russian Technologies, an investment fund backed by Alfa Group.

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ALL ABOUT TOWN

Friday, Nov. 21


Learn more about Russian labor laws at Labor Law Seminar 2014 at the Courtyard by Marriott St. Petersburg Center West Pushkin Hotel this morning at 166 Kanala Griboyedova. Sponsored by Baker and McKenzie and the Pepeliaev Group, the event begins at 9 a.m. and will discuss amendments to existing laws, employment terms, risks of termination and other pressing matters.


Educate yourself about educational careers at Education and Career XXI — November 2014, a two-day fair hosted at Lenexpo convention center on Vasilievsky Island that welcomes students and educators alike to develop relationships between scholarly institutions and learn more about the educational market in Russia and abroad.



Saturday, Nov. 22


Russian Premier League-leaders Zenit St. Petersburg return from the international break to take on Kuban Krasnodar at Petrovsky Stadium this evening at 7 p.m. Tickets for the game can still be purchased on the club’s website, at the Petrovsky Stadium box office or in any of the club’s merchandise stores.



Sunday, Nov. 23


Get in the holiday spirit at today’s Winter Bazzar at the Astoria Hotel. Featuring gifts from around the world such as French eclairs, Dutch cheeses and Indian jewelry, the annual event organized by the International Women’s Club will feature 18 international stands and raise money for charity through the sales of a diversity of products that further illustrate the city’s international connections.



Monday, Nov. 24


Dr. Axel Schulte, Department Head at Fraunhofer Institute for Material Flow and Logistics in Dortmund, Germany, is the featured speaker at the SPIBA Industrial Committee lecture on “The Fourth Industrial Revolution: Digitalization of the Supply Chain.” The event begins at 4 p.m. at the Graduate School of Management at 3 Volkohvsky Pereulok and registration is required by Nov. 21 either by emailing office@spiba.ru or calling 325 9091.



Tuesday, Nov. 25


Tag along with AmCham during their “Industrial St. Petersburg” Tour program today. This incarnation of the ongoing series will visit Philip Morris Izhora and include an Environmental Health and Safety Committee meeting.


Find out how to expand your business east during the “Business With China” forum beginning today and concluding tomorrow at the Lenexpo convention center. The largest Russian forum dedicated to business with the Asian giant, topics that will be discussed include logistics, customs clearance, trade financing and many more.



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