Venture financing is viewed as an investment activity with a high level of risk, aimed at supporting startups and innovative enterprises with growth potential.
The draft law includes a clear definition of participants in the venture market, such as business angels, venture investors, fund managers, and the venture funds themselves, as well as innovative companies.
A separate section addresses the legal instruments for venture investors. The draft law includes mechanisms such as agreements on future equity in the company, convertible loans, and option contracts, which are common in international practice for early-stage startup investments.
Regulation of the activities of venture funds is also provided for in the draft law.
The draft law allows for the creation of funds both without the formation of a legal entity and in the form of a limited partnership and other organizational and legal forms. It also establishes requirements for venture managers, including obligations for auditing and regular reporting to investors.
Additionally, a separate article provides for the maintenance of a registry of venture funds and managers, which will be under the control of the authorized state body for regulating the securities market.
This registry must be open to the public, except for confidential information.
The draft also includes provisions for combating the financing of criminal activities and the legalization of proceeds obtained through criminal means in the context of venture investments. Venture managers are required to conduct checks on the sources of funds and investors in accordance with current legislation.
The Cabinet of Ministers has been proposed to adapt its regulations to the requirements of the new law within six months.
