IMPROVEMENT OF ORGANIZATIONAL AND LEGAL SUPPORT OF VENTURE CAPITAL FUNDS CREATED UNDER INVESTMENT PARTNERSHIPS AGREEMENT IN THE RUSSIAN FEDERATION
E. Yu. Makushina
National Research University Higher School of Economics, Moscow, Russia
e-mail: makushinae@gmail.com
Abstract. Russia’s private equity and venture capital industry is in the early stages of development. In 2011 the federal law on investment partnership (335-FZ) was enacted. It brought international best practices of collective investments into Russian legal system by making it possible to create venture capital funds through investment partnership. This particular type of funds is the closest in substance to the most popular legal form of venture capital funds globally which is limited liability partnership.
Unlike international practice, in the Russian Federation this form of financing technology companies has not become widespread, which, among other things, is explained by the insufficient development of the terms of an investment partnership agreement that are understandable and open to a wide range of investors, as well as the lack of a system for information disclosure to investors about financial results, fund’s return, investment portfolio information, fees, carried interest of a venture fund created by under an investment partnership agreement.
The purpose of the article is to develop proposals that help increase the investment attractiveness and efficiency of venture capital funds established under an investment partnership agreement.
To achieve this goal, the following set of scientific methods and techniques were used: classification, induction and deduction, critical and logical analysis, generalization, structuring. The theoretical and methodological basis is the scientific achievements of foreign researchers, legislative acts of the Russian Federation, as well as international documents that are developed by professional associations in order to improve the investment climate in the private equity and venture capital investment industry.
The novelty of the study is represented by the following results: recommendations were developed on the formation of the terms of an investment partnership agreement in matters of distribution of profits of a venture fund, remuneration of a managing partner, which will ensure clear and transparent conditions for interaction between managers and investors, and also reflect practical significance. In order to ensure comparability of information at the macro level, disclosed by investment funds, a proposal has been put forward to prepare a report for investors using one of the following documents: a) International Private Equity and Venture Capital Investor Reporting Guidelines; b) Investor Reporting Guidelines.
Key words: venture capital funds, investment partnership, carried interest, investor reporting.
Cite as: Makushina, E. Yu. (2022) [Improvement of organizational and legal support of venture capital funds created under investment partnerships agreement in the Russian Federation]. Intellekt. Innovacii. Investicii [Intellect. Innovations. Investments]. Vol. 5, pp. 47–57. https://doi.org/10.25198/2077-7175-2022-5-47.
