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Russian Venture Company Fund of venture funds


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Russian Venture Company Fund of venture funds

  1. 1. Russian Venture Company Fund of venture funds February 28, 2007 Vitaly V. Petrov Ministry of Economic Development and Trade Russian Federation
  2. 2. Russian Venture Company How it invests in high tech startups ‡@ Fund of funds Russian RUB 15 billion level Venture (~$ 565 million) company Venture funds Privately managed venture funds level MC Venture MC Venture MC Venture From RUB 1.2 billion fund fund fund (~$45 million) MC Venture MC Venture MC Venture To RUB 3.0 billion fund fund fund (~$115 million) Startup level Microelectronics Telecommunications Biotechnologies Nanotechnologies Information Medical Alternative technologies technologies energy ☣
  3. 3. Russian Venture Company Basic structure ‡A Venture JSC Russian Venture Specialists Company 49% RUB 0.6-1.5 billion manage 10 or more venture funds 51% Private Fund manage RUB 0.6-1.5 Venture funds billion VC fund Management investors companies (closed-end mutual funds) Carried interest (20% max) Return on investment (~80%) Management fee (2,5% max) Investments Early stage innovative startups
  4. 4. Russian Venture Company Board of Directors ‡B Government Directors Independent Directors Herman Gref Esko Aho Minister of Economic President, SITRA National Development Innovation Fund and Trade, Russia Finland Chairman of the Board Dmitry Livanov Yigal Erlich Vice Minister of Education Former Chairman, YOZMA and Science, Russia Fund of Venture Funds Israel Igor Artemiev Konstantin Remchukov Chairman of Anti-Trust Editor-in-Chief, Independent Committee, Russia Newspaper Russia Alexei Korobov CEO, Russian Venture Company
  5. 5. Russian Venture Company Terms of the First Venture Funds ‡C Our first competitive selection starts NOW ! Terms of the Venture Funds Selection Schedule Total Investment Limit RUB 4.8 billion March 1 Competition announced, rules and RVC Investment (49% of RUB 600 million to RUB 1.5 billion application forms each fund) published VC Fund Investment Diversified in: March 26 First day applications areas Security and counterterrorism accepted Biotechnologies Medical technologies and equipment April 15 Deadline for Nanotech and new materials applications IT and telecom Environmental technologies Transportation and aerospace May 11 RVC Board meets to Alternative energy listen to presentations of Early stage investment 80% of total competitors and Commitments from 51% required select winning private investors applications Commitments from fund 1% minimum May 14 Competition results managers announced Escrow deposit RBL 20 million RVC return cap 5% or CPI rate, whichever is less
  6. 6. Russian Venture Company Why cap on returns? ‡D Government will cap its return from VC funds at 5% per annum! • RVC funds will be refundable at Extra IRR 5% or CPI inflation rate, For 5, 7 and 10 years of fund life whichever is less! 40% • If a fund is successful, limited 5 years partners buy out the 35% government's share in the fund 7 years Extra venture fund IRR 30% at a negative or zero real interest 25% 10 years rate to the government 20% • This way the government will 15% take out some of investment risk • Our goal is not to make money 10% but to create Russian hi-tech 5% sector 0% 10% 30% 50% 70% 90% 110% 130% 150% WE GIVE FUND Base venture fund IRR YOU GROW STARTUPS YOU KEEP NEARLY ALL NET INCOME RVC share 49%, IRR to RVC 5% Management fee and carried interest are not factored in
  7. 7. Russian Venture Company The Message For investors and venture For mass media: capitalists: • Tell everyone who • Hire the best teams dreams of building a • Seek most promising new Google или Intel, startups but does not dare – • Come and apply • We want to work with Start founding startups you now unless you want to be late for money. It's time. Money for new success stories is on the way.