Putin in favor of changing legislation on venture financing
MOSCOW. Sept 18 (Interfax) - Russian President Vladimir Putin believes legislation on venture financing needs to be amended in order to decrease businesses' liability when relevant projects fail.
Presidential aide Andrei Belousov said at a meeting with parties to technological projects and the National Technological Initiative on Wednesday that a solution to this problem has long been overdue.
"Venture financing is when a company acquires equity of startups without understanding anything about the market. The result is eight failures and two successes, which cover those eight failures," Belousov said.
"Here, unfortunately, legislation is such that for those eight failures with budgetary funding you can get 20 years. For that reason, everyone runs away from this venture financing," he said.
"This is definitely not a new problem [...] because there's not another way of working with startups anywhere in the world," Belousov said.
"You issued an instruction, but discussions are still underway in the government regarding how all this should be done," he said.
Putin agreed, saying, "Of course, there should be certain restrictions [on the use of public funds in venture projects]. Obviously, there can't be failure after failure forever. But I want to tell you that in my personal experience, there are situations in which, despite a large and protracted number of failures, we ultimately made the right decision to support certain developments that ended up producing a very good result for the country," he said.
Putin asked for relevant proposals and promised to reach an agreement with the Accounts Chamber and General Prosecutor's Office. "It ultimately comes down to one thing: how much we're willing to risk and what to write off as losses," he said.
"Of course, there's international practice, so we need to take it and apply it, not reinvent the wheel," Putin said.
He promised that he would consult the government and that "the issue will be resolved quickly."