Pension funds, insurance companies could fuel venture capital
By Aynur Karimova
The resources of Azerbaijan's pension funds and the insurance companies could become sources of venture capital for start-up projects in the country, Osman Gunduz believes.
The member of the Supervisory Board of the State Fund for Development of Information Technologies of Azerbaijan told Trend that certain changes in legislation would allow pension funds or insurance companies to place some of their assets in riskier instruments.
"This is from international experience, which is currently applied in the western countries, where pension funds are actively involved in investing in innovative projects. Thus, it is possible to establish venture capital funds by applying international experience and the resources of the state," he said.
He believes strengthening of the legislative framework is of significant importance in terms of the development of the venture capital funds.
"International experience shows us that venture capital funds play an important role in the development of the online business and start-up movement. Support of the state and strengthening of cooperation with foreign funds is needed in order to achieve results in this field. One could also resort to the help of ‘business angels’ who are able to invest in venture capital financing. But the lack of insurance against risks does not allow us to take any steps in this regard," he noted.
Gunduz went on to add that Azerbaijan still needs to study the international experience in the venture financing field, and added that government regulation is of great importance in doing so.
Earlier, Executive Director of the High Technologies Park Seymur Agayev told Trend that the park encourages the establishment of venture capital fund to support IT-businesses, which can become a link between local and foreign projects.
The main task in establishing such a fund is to form the right mechanism to integrate into the regional and global ecosystem.
In this regard, the High Technologies Park focuses on local and foreign investors, and actively conducts negotiations with them.
Agayev also said that due to the fact that venture financing is a relatively new field in Azerbaijan, legal regulation is required for its formation.
Azerbaijan's Communication and High Technologies Ministry reported that leading venture funds such as Global Venture Alliance and the Global Catalyst Partners have expressed their willingness to invest in start-up projects in Azerbaijan.
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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
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