Russian Innovators Don't Trust Russian VCs

Russian Innovators Don't Trust Russian VCs

Summary: I met with a Russian delegation to Silicon Valley recently, which was seeking to copy some of our best practices. [Please see: Turning Oil Into Innovation: Russian Delegation Seeks Silicon Valley's LessonsAn interesting issue emerged during our conversation.

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I met with a Russian delegation to Silicon Valley recently, which was seeking to copy some of our best practices. [Please see: Turning Oil Into Innovation: Russian Delegation Seeks Silicon Valley's Lessons

An interesting issue emerged during our conversation. The Russian government is helping to establish several large venture capital funds with a boost in revenues from oil, However, Russian entrepreneurs are unwilling to share their ideas with the VC fund managers because they think they will steal their ideas, said Yuri Ammosov, a senior policy officer in the Russian Ministry of Economic Development and Trade.

"I've tried to explain to them that the people running the VC funds are not trying to steal their ideas. Their job is to run the fund, and invest in good ideas," said Mr Ammosov.

That's a significant problem for Russian innovation...

Topics: Banking, Government, Government US

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  • Might be rational

    After all, Russia has a huge organized crime problem (if your friendly neighborhood VC has a don as a major investor, he's not going to tell you). Couple this with the fact that accepting money from venture capitalists always means ceding ultimate control of your business to them (if they don't think you're doing a good job recouping their investments, they can fire you), then it's not surprising that Russian entrepreneurs are reluctant to accept help from VCs.
    John L. Ries
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