Anali Ekonomskog fakulteta u Subotici (Jan 2014)
Conceptual framework of attraction in Serbian financing function of venture capital funds
Abstract
For most companies, before their business and financial activities become stable and relatively predictable, traditional funding sources are expensive and difficult to obtain. Adverse conditions in the capital markets represent an almost insurmountable obstacle to finance the company through the issuance of debt and equity securities as the case of companies which are not quoted on the stock exchange. Lack of understanding for entrepreneurs by standard lender creates a bottleneck to business ideas into reality. The aim of this paper is to awake interest in the business financing venture capital funds, which is an alternative for traditional forms of inancing. Risk capital is the capital that comes from specialized funds with a strategy of investing in innovative small and medium-sized businesses that have high growth potential. Although funds are primarily driven by the idea to make a large profit, it may be noted that almost every investment fund contributed to the development of individual sectors or the economy as a whole. A number of countries invested efforts to promote the activities of venture capital, innovation and entrepreneurship and thus counteract the recession carried by the global economic crisis. Venture capital in the United States over the years proved to be a significant driver of economic development. The European Union has recognized its importance and may in the future expect dynamic growth of venture capital in the entire territory of Europe. Unenviable economic situation, a series of administrative problems and high tariffs quoted Serbia as the fifth country among the former states of the Socialist Federal Republic of Yugoslavia, the attractiveness of venture capital, leaving behind only Montenegro. This paper will analyze indicators of economic activity of the country, taxation, entrepreneurial culture, depth of a capital market, the social environment and the protection of investors, who make the business environment more attractive for venture capital investors. Key factors will present alarming situation in Serbia to the carriers of economic policy.
