Economic essence of a venture entrepreneurship
The main task of venture funding — growth of specific business by provision of a certain amount of a money in exchange for a share in the authorized capital or acquisition of a share block.
The venture capital is not only investments into the small enterprises which are on initial stage of business, but also a stock investment of the entities for the purpose of receipt of high profit after passing of listing and registration of these shares on the stock exchange. The venture capital is guided not by dividends, and by a long-term growth of the equity.
The venture capital — represents financing of capital stock of the innovative small businesses having the considerable potential of growth at a stage of their creation and sales of products, in total with consulting support and high degree of the involvement into decision making process.
The American practice of the organization and financing of exploratory researches, implementations of results in production generated a peculiar form of an innovative entrepreneurship — risk (venture) business. In the USA a typical form of managing risk business became only in 1970 — the 1980th with forming of the new directions of scientific and technical progress, and first of all electronic engineers.
To the middle of the 80th of the XX century in the USA over 650 venture firms worked. The governments of many states which are looking for opportunities to help local firms with creation of new workplaces began to join the ranks of venture capitalists too. In 1987 the total amount of investments from all sources of a venture capital constituted about 4,5 billion dollars.
In the USA, this venture investment financing of projects a startup (start-up) is considered, i.e. the venture capital is more often used on initial stage of product development and creation of a prototype. Therefore small enterprises which are engaged in the knowledge-intensive developments address a venture capital more often. Basis market success of these firms in their rapid growth. As is well-known development and implementation of new scientific and technical achievements, so, leads expansion of production to a situation when such factor as “the production scale” comes into effect. Further small enterprises can take a big market share, especially if it is connected with the latest technologies.
Risky enterprises of the size small, as a rule, are occupied with development of scientific ideas and their transformation into new technologies and products. They differ in it from regular forms of small and medium business. The main distribution sphere of risk business — the latest fast-growing knowledge-intensive industries: electronic engineer, information scientist, chemistry (new materials), new means of communication, bioengineering.
Risk business by no means not accidentally received the name. It is distinguished by instability, unreliability of a provision. “Death rate” of the risk organizations is very high. And only units turned in large producers of high technologies, like “Copier”, Intel, “Apple the computer”, etc. However return of the survived firms is so big both from the point of view of profit, and from the point of view of production enhancement that does such practice reasonable.