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N1 |
Sunday,
09.02.2020.|
10:51
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Copy linkHow to get to investments for startups and innovations? – Capital market not developed enough to attract venture funds
The minister of innovations and technological development of Serbia, Nenad Popovic, announced that Serbia would be ready to enter the market of venture funds, for risky investments, needed for the financing of the development of startups and innovations, in 2020.
– The legislative framework which will enable this is a good move, but it's not enough for this type of financing to take root. The capital market is not liquid or developed enough to attract such funds – says Sinisa Krneta, the director of the Belgrade Stock Exchange.
– Young startups need funds which are ready to make risky investments, which will finance their development, and the state is making a good move in including them in the Serbian market – Krneta said.
He adds that the capital market needs to be functional in order for this to happen, which means that it has to be sufficiently developed and liquid.
– Why is this important? When considering an investment in an innovative, young company, investors also consider how to withdraw when the company reaches a certain degree of development, and that's where problems occur – Krneta says.
– Our capital market is not liquid enough to provide a favorable market environment in which venture capital funds would get a favorable opportunity to withdraw from those investments, which would entail offering the shares of these startups at the stock exchange after a certain time period – he said.
According to him, the key to a more developed and liquid capital market is a series of public initial offerings at the Belgrade Stock Exchange of state and private companies.
– It's important for a state company to break the ice, as neither has been privatized by offering shares to a wide range of investors in the market so far – Krneta emphasized.
This would pave the way to a series of PIOs coming from the private sector. In 2019, there were no PIOs, Krneta reminds, although the year was the best post-crisis year in the Serbian capital market.
– The legislative framework which will enable this is a good move, but it's not enough for this type of financing to take root. The capital market is not liquid or developed enough to attract such funds – says Sinisa Krneta, the director of the Belgrade Stock Exchange.
– Young startups need funds which are ready to make risky investments, which will finance their development, and the state is making a good move in including them in the Serbian market – Krneta said.
He adds that the capital market needs to be functional in order for this to happen, which means that it has to be sufficiently developed and liquid.
– Why is this important? When considering an investment in an innovative, young company, investors also consider how to withdraw when the company reaches a certain degree of development, and that's where problems occur – Krneta says.
– Our capital market is not liquid enough to provide a favorable market environment in which venture capital funds would get a favorable opportunity to withdraw from those investments, which would entail offering the shares of these startups at the stock exchange after a certain time period – he said.
According to him, the key to a more developed and liquid capital market is a series of public initial offerings at the Belgrade Stock Exchange of state and private companies.
– It's important for a state company to break the ice, as neither has been privatized by offering shares to a wide range of investors in the market so far – Krneta emphasized.
This would pave the way to a series of PIOs coming from the private sector. In 2019, there were no PIOs, Krneta reminds, although the year was the best post-crisis year in the Serbian capital market.
Companies:
Ministarstvo nauke, tehnološkog razvoja i inovacija Republike Srbije
Beogradska berza a.d. Beograd
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