Ulyanova O.


Professor of the Department of Economic Theory and Economic Policy,

Volgograd State University of Architecture and Civil Engineering 




Innovative development of the country depends on the diversification of sources of financing venture projects. Sources of venture capital are:

- formal financial institutions are pension funds, insurance companies, investment funds;

- informal financial institutions are individual venture investors or "business angels"; they invest part of their capital and are involved in managing projects independently.

Business angels play the role of intermediaries in establishing contacts with partners, ustomers, suppliers and sponsorsprovide valuable information about the market. Most business angels are successful entrepreneurs who have considerableexperience in developing their own business. A smaller part it's highly paid professionals in large companies (executives, consultants, lawyers, etc.).

The informal venture capital market - a special form of concentration and use of this capital, which is provided by individual venture capitalists ("business angels"), innovative companies with high growth potential. As the infrastructure of the informal venture capital market are the business angel network. The main goal of networking is to foster contacts between business angels and venture capital projects initiated, providing reliable information of individual investors, reducing the risk of venture financing.

Currently in Germany there are more than 40 business angel networks, most of whom are members of the National Networkof Business Angels [1][1]. National Network of Business Angels in Germany founded in 1998, is a community of individuals and legal entities, which include sponsors, institutional members, business angel networks, and academics. It is a member of the European Network of Business Angels [2][2].

The institutionalization of a national network of business angelstakes place when typing is most often carried out by the Financial Action Business Angels. The formation of a stableinstitutional innovation sphere can be defined as the development of newly acquired or imported the rules and regulations in the form of stable institutions and organizations providing a system of exogenous constraints to economic operators. The institutionalization of a national network involvesthe participation of legal entities in the investment process of individual private investors (business angels) in the financial markets.

The institutionalization of a national network of business angels in Germany comprises the following steps:

Step 1 (1998-2000.) - A network of business angels as an organization that provides funding for successful early phase of the project through the involvement of business angels. This organization promotes the idea of business angels, and develops new services, finds new market niche for the financing of capital.

Step 2 (2001-2004.) - The formation of a national network of investment as an institution, the establishment of recognized organizations of German business angel networks and the main subject of the economic culture of business angels. During this period, increasing the market potential of the informal capital, which defines core competencies, developprofessional standards and institutionalize the exchange of experience among business angels. However, the structural organization of the informal market is still unstable, and business angels lack of financial resources.

Step 3 (2005-2008.) - Promotion of a national network of business angels in the development of the informal venture capital market. This is an important step in the development finance sector in the early phase of the operation of companies with high growth potential.

National Network is an important partner in the political decision-making and finding sponsors. Framework conditionsfor investments of business angels are improving, strengthening market structures, actors act professionally. The market is becoming more complex and differentiated to meet the ever changing market requirements. Funding for projects of business angels is on a par with finance and venture capital plays an important role in the dissemination of innovative technologies.

In world practice known single-level and two-level model of the informal venture capital market. In Western Europe and Germany circulated a two-tier model which includes a national network of business angels networks and regional investors. Such a system promotes healthy competition between the regional networks. To institutionalize a network of business angels funding schemes apply these networks, which involve participation ingovernment, nonprofit and commercial organizations.

Business angels invest in the early stages of more capital thanventure capital funds. Capital Business Angels are not fullyrealized. This is a theme of public policy, since the conditions for investment in Germany are weaker than in other European countries. In the U.S., business angels invest 16 billion dollars per year, while in Germany only 3.5 billion dollars per year, it is 4.5 times less.

Business angel networks in the EU receive considerable federal and regional state financial support. Funding from the federal budget received 18% of networks, from the regional budget - 35, from the European Union - 22% of the networks. Membership dues to business angel networks charge - 56%, with the initiators of the project - 34% of the networks. Additional funding from sponsors receive 46% of the networks; income from activities, commission - 32% of the networks [2].

Among the regional networks of business angels in Germany isthe leader of the "Network of Northern Bavaria," created as a legal entity in the form of a limited liability company. Its budgetamounts to 30% of the subject of the federation and 70% of sponsor contributions. The criteria for leadership of the regional network - the number of investment transactions and the amount of capital raised. Among the regional networks of business angels in Germany is the leader of the "Network of Northern Bavaria," created as a legal entity in the form of a limited liability company. Its budgetamounts to 30% of the subject of the federation and 70% of sponsor contributions. The criteria for leadership of the regional network is the number of investment transactions and the amount of capital raised.

Two-thirds of business angels consider projects within one to two hours of travel to the company. If investors have a certain investment interests, or invest in high-tech sector, they are willing to consider and more geographically remote projects.This is typical for companies in the field of import-export operations and projects that are associated with the introduction of foreign technologies. The leading areas of venture capital investment is the software, services, manufacturing, retail and wholesale trade, finance and insurance. In the first place there is a group that represents companies in the field of software development, security technology (27%). Second place goes to a group that brings together pharmacology, biotechnology and medical equipment (24%). Third place is the service sector (13%). In 2011 a national network of business angels in Germany as a priority area for venture capital has identified the development of energy saving and environmental technologies, new materials, medical equipment, software [4].

The institutionalization of a national network of business angelsin Russia is evolutionary. In different regions of the already established "intermediate" elements of a two-level model in the face of networking and business angel clubs that are established as legal entities. For example, non-profit partnership The National Network of Business Angels "Private Capital", a non-profit partnership of the National Association of Business Angels, a limited liability company "Bureau of venture capital investments" (Moscow), a non-profit partnership of the Association of Business Angels "Start Invest" (Nizhny Novgorod). Currently, the national network is in its infancy, is especially important financial support from the state and by organizations and private firms, it will form a two-tier venture capital market infrastructure.



1. Business Angels Netzwerk Deutschland e.V:

2. Еuropean Business Angel Network:

3. Statistics compendium. Based on the Information Provided by Business Angels Networks Having Responded to the Survey Conducted in 2007// European Business Angel Network, 11.2007.

4. Sparen Macht Business Angels Glücklich. Business Angels Netzwerk Deutschland e.V:



[1]  Business Angels Netzwerks Deutschland (BAND).

[2] Еuropean Business Angel Network (EBAN).