FINANCES OF THE INSTITUTIONAL SECTORS

ZHYLINSKA Oksana ¹

¹Taras Shevchenko National University of Kyiv
OrcID ID : https://orcid.org/0000-0001-8366-0474

Transformation in investment behaviour of households as a factor of venture capital firms’ development

The paper characterizes transformational shifts in investment behaviour of households with the establishment of information type of economic management, which stimulate investment activity of a particular professional group — scientific and technical personnel — by transformation of their savings into ""patient” investments to implement risk innovation projects in reification of scientific and technical knowledge, protected by patents, in high-tech products through creation of venture capital firms. Attention is focused on economic nature of venture capital firm as a new economic institute of introduction of intellectual property objects to economic circulation, ensuring continuity of life cycle for which objectifies establishment of informal and institutional investors’ networks. From the perspective of institutional approach, the paper ascertains the essence of venture capital firm as a network good — the object of venture investment, demand for which is expanded by a network of informal investors — founders and business angels. Cooperation among informal investors enables reduction of transaction and transformation spending on investment stage of informal sector continuity of company’s life cycle and increases its value as an object of institutional venture capital investments. The study reveals features of ""angel” investment as successful combination of private financial and human resources and complementary weal of venture capital firm during its early stages. Motivation for investment activity of business angels in the context of solving the social problems of information society is described. The outcomes show the newest trend of self-organization of ""angel” investment in network basis, which uses Internet technology and resources and enables to get effects of transformation and transaction search costs reducing due to ex-ante-evaluation of venture capital firm as an investment object, to negotiate and to make investment agreements with start-up’s teams. The paper analyses the prospects for establishment and development of venture capital firms and venture capital investment in domestic practice against the background of negative trends of decreasing research and inventive activities of domestic scientific and technical personnel, deterioration of socio-demographic characteristics of the Ukrainian population, decline in its incomes and institutional deformations of the national economy.

Keywords: household, venture capital firm, business angel, business angel investment, network weal, venture capital investment, ex-ante-evaluation of venture capital firm.

JEL: D10, D19

Zhylinska O. . Transformation in investment behaviour of households as a factor of venture capital firms’ development / O. . Zhylinska // Фінанси України. - 2014. - № 3. - C. 83-99.