Why do many Russian startups have to look for investors abroad, even though domestic legislation provides for tax incentives and support programs for innovative projects? What exactly do our entrepreneurs lack to fully launch high‑tech enterprises within the country, and how can the problem of insufficient investment in Russia’s innovative economy be solved?
Our tax incentives and grants are a great way to ensure that a startup doesn’t just die at the idea stage or at the stage of the first prototype (pre‑seed). The state honestly pays for the rent of a cheap office in a tech park, covers part of the developers’ salaries through subsidies, and refunds VAT for the purchase of servers. But when the product is ready for scaling, a completely different game begins. And here’s what we critically lack:
1. Long‑term and smart money. Russian private investors are used to playing the long game only with concrete. Investing 50 million rubles in a shopping center at 12% per annum is psychologically more comfortable for them than giving the same money to an IT company. And there are few venture funds within the country, and they often look for co‑investors from abroad themselves, because the capital pool is deeper there. Abroad, funds are willing to wait ten years for an IPO, understanding that nine out of ten projects will fail, but one will recoup everything else. Here, the fund wants to see a clear exit (exit) within three to four years.
2. Real demand from the giants.
In the States, a startup’s path is clear: you develop an awesome facial recognition algorithm — and tomorrow Apple or Google will buy it. You create a delivery service — and Amazon will eat it up. Our guys have nowhere to go after creating the technology. The largest Russian corporations historically prefer to buy ready‑made Western solutions or develop their own in‑house solutions, and they’re afraid to implement an external innovative product due to bureaucracy and the risk of breaking their established systems. A startup needs its first major customer, a pioneer right here at home, who will turn a blind eye to the bugs of the beta version and sign a contract. Without this "pilot", the Western investor will not even talk.
3. Intellectual property protection
The neural network developer is not thinking about the code, but about who owns this neural network if he made it in Skolkovo with grant money, and then quarreled with the director of the foundation. Our legal base is strong, the courts are working, but law enforcement is scary. Entrepreneurs fear corporate conflicts, sudden changes in the rules of the game, or the seizure of assets. A foreign investor provides not only cash but also their legal umbrella. Under the wing of an American or European fund, a Russian founder feels more protected from hostile takeovers within the country.
4. Data consumption infrastructure
Training a complex neural network requires world‑class computing power. Access to top‑of‑the‑line graphics cards (GPUs), independent cloud clusters, and fast communication channels is limited by sanctions, logistics, and prices. Building your own parallel infrastructure is expensive and time‑consuming, and foreign clouds are becoming toxic. It’s a dead end: the technology exists, but it’s physically impossible to launch it.
How to solve the problem of insufficient investment? There’s no single magic button here; the solution is comprehensive:
- Make state corporations moderators. Don’t force them to graciously buy startups; instead, tie the KPI of top managers to the number of successful pilot implementations by small businesses. If you want a bonus at the end of the year, find and integrate five domestic innovative solutions. Create transparent sandbox environments where the corporation is required to test the startup’s product on real traffic within a fixed budget.
- Launch a mechanism for public‑private matching capital. The state tells a private fund: “I will invest a billion in your portfolio on the condition that you raise another two billion in private money.” This reduces risks for large businesses and encourages institutional investors (such as pension or insurance funds) to take a serious look at venture capital for the first time. In addition, it is necessary to allow large commodity companies to invest funds in such funds in exchange for tax holidays.
- Legalize failures. Currently, an entrepreneur who closes a failed high‑tech business risks facing criminal charges for “misuse of subsidies,” even though they acted in good faith. A clear line needs to be drawn between criminal activity and honest commercial risk. If a founder has recovered what remains and publicly documented the mistakes, they should be granted the right to a second and third attempt without being branded as a fraudster.
- Create a secondary market for shares. An investor will be more willing to invest if they know that the share can be sold not after eight years on the stock exchange, but after three years to another fund within the country. This requires a regulated platform for trading non‑public shares with clear valuation rules.
- Invest in hardware and personnel. The benefits should be extended further — to the purchase of server equipment without import duties and to the training of operations engineers. Without our own high‑performance computing infrastructure, we will continue to write brilliant algorithms that have nowhere to run.
And while this momentum is building, our guys will continue to make pitches via video call from Moscow coffee shops for funds from Dubai, Singapore, and Tel Aviv. But they’re not doing this because they don’t love their country.