FACTORS OF VENTURE CAPITAL INVESTMENT ACTIVATION

The relevance of the topic consists in the fact that due to limited start-up capital, high risk and uncertainty about profitability, lack of experience and, consequently, a positive credit history, venture capital is recognized as the main source of financing the development of many companies in the early stages. The purpose of the paper is to prove the hypothesis of the determining influence of fiscal factors of stimulation of research and development and a set of stable economic and political preconditions for expanding the presence of venture capital in the country. Based on the data of twenty European countries for 2007 — 2018 (240 observation points), a regression dependence of the amount of invested venture capital on tax preferences in research and development, research and development costs and country risk were constructed. The assessment of the parameters of the created regression model made it possible to prove that it can be used for forecasting volumes of investment of venture capital at the change of the factors of fiscal policy and reduction of macroeconomic risks. The directions of activation of venture financing for the countries are formed: for the development of high technologies and the implementation of innovative ideas, the state should apply tax benefits and preferences for research activities of small and medium enterprises; expansion is necessary for state support for innovation through the consolidation of state and local budgets on research programs, the creation of research and production clusters, technology incubators, support for individuals in their innovation initiatives; the high risk of the country not only leads to a decrease in the inflow of foreign venture capital: domestic investors will withdraw their venture capital and direct it to countries where the political and economic situation is more stable, which further deepens the economic shocks of the national economy and leads to political ones. The implementation of these measures will promote the development of high-tech enterprises, job creation in the country by overcoming the problem of limited financial resources through investment of venture capital.


INTRODUCTION
Due to limited start-up capital, high risk and uncertainty about profitability, lack of work experience and, consequently, a positive credit history, venture capital is recognized as the main source of financing the development of many companies at the early stages. It is a long-term investment in innovative and high-tech projects. Due to the high risk and, at the same time, the possibility of obtaining high profits, venture financing activities are influenced by a number of factors. The task of a venture investor is to assess business initiatives, the conditions of their implementation, the potential for profit.
According to the association Invest Europe [1], whose statistics are recognized by the European Commission and the OECD (Organization for Economic Cooperation and Development) as an authoritative source of data on European private and venture capital, venture capital in 2020 reached almost 15.5 billion Euros. The predominant sources of financing for venture capital in Europe are government agencies (30 %), family offices & private individuals (18 %), and funds & other asset managers (16 %) [1]. developed, technologies were tested for mass production and sale), then in 2020 the initial investment is 52 % of total venture capital. The most funded companies are in the field of ICT, biotechnology and healthcare, and consumer goods and services [1].
However, it should be noted that the data on the presence of venture capital differ across European countries, confirming the view that there are macroeconomic preconditions that act as incentives or disincentives for the development of venture capital.

THE ANALYSIS OF THE RESEARCH AND STATEMENT OF THE TASK
Research by foreign scholars [2] on the venture capital impact on socio-economic indices of countries indicates that venture capital has a positive influence on company growth, and the effect of its investment is manifested in the growth of the economy and employment increase.
A number of studies by foreign authors deal with identifying risk factors in venture financing. J. Brander, R. Amit, W. Antweiler [3] study the pooling of investment capital in venture funds and prove their effectiveness through the possibility of portfolio diversification and risk reduction. M. Cherif,S. Elouaer [4] point out that, in addition to contracting, phased financing is an effective mechanism for venture capitalists via reducing problems within formation a symmetry and controlling the risks posed by managerial behavior.
Other researchers determine the dependence of venture financing models due to the differences in venture capital sources. Comparing the sources of funds and investment activities of venture capital in Germany, Israel, Japan and the United Kingdom, scientists [5] find out that the sources of venture capital funds differ significantly in different countries: bank capital predominates in Germany, corporate capital in Israel, insurance companies in Japan and pension funds in the United Kingdom. The authors point out that this difference in funding sources creates differences in investment models: banks and pension funds support venture capital investment at a later stage than individual and corporate funds, especially in Israel and the UK. G. Andrieu [6] proves the existence of differences between different types of venture funds, in particular, related to banks or industrial companies. A team of researchers [7] on the basis of econometric analysis finds out that funds with bank venture capital show a lower financial risk than companies that do not attract it. Other authors [8] argue that a larger state share in venture capital is associated with a longer duration of the investment.
Y. Li and S. Zahra [9] study the level of venture capital activity in different countries and suggest that its differences depend on the levels of formal institutional development, namely the response to incentives provided by formal institutions depending on different cultural conditions. The authors prove that formal institutions have a positive effect on the level of venture capital activity.
In our opinion, the study of venture capital should continue in the direction of determining the fiscal and economic-political factors influencing its formation and investment, namely: influence on the formation of venture capital in the country of state support for innovation through a system of expenditures and tax preferences for research and development, as well as systems of possible political, financial, credit and economic shocks, which are specific to a particular country and are embodied in the risk assessment of the country.

THE PURPOSE OF THE PAPER
The purpose of the paper is to prove the hypothesis of the determining influence of fiscal factors of incentives of research and development and a set of stable economic and political preconditions for expanding the presence of venture capital in the country.
To achieve this purpose, it is necessary to use methods of econometric modeling in the processing of a sufficiently representative statistical sample.
To compile the statistical base, annual data for twenty European countries in the period 2007-2018 were used, i.e. modeling is based on 240 observation points.

RESEARCH RESULTS
OECD statistics were selected as the information base for the data on venture capital (y) by European countries [10] (Table 1). It is a recognized fact that venture capital is mostly used to finance innovative projects. In our opinion, the factors of fiscal policy (taxation and public funding of research and development) contribute to attracting investment in the form of venture capital.
The statistical base on the level of tax preferences for research expenditures for small and medium-sized enterprises (it is mostly their research that mainly requires funding from venture funds) is formed on the basis of [11] (Table 2). Gross input for research work, which we propose to determine as the second factor (x2) - Table 3, include the total input of all resident companies, research institutes, university and government laboratories. Of course, public sources make up only a part of funding, but the effect of such an infusion into the field of science should become the basis for the public policy of financing innovative development.
It is appropriate to determine the indicator of the country risk premium as the last factor (x3) of the model. Its statistics are published by the famous expert A. Damodaran [13], and it compiles a number of political, financial, credit and economic components (Table 4). (1) Let us assess the parameters of the created model. The multiple correlation coefficient is R = 0.7857, the determination coefficient, respectively, R 2 = 0.7857 2 = 0.6173. Thus, it is possible to confirm the existence of a close relationship between the amount of invested venture capital and the above factors.
As factual value F > Fkp, the coefficient of determination is statistically significant and the created regression equation is statistically reliable. Besides, paired correlation coefficients |r|<0.7, which indicates the lack of multicollinearity of factors. The significance of the additional inclusion of the factor (private F -criterion) was also assessed, which made it possible to determine that all the factors listed in the model (x1, x2, x3) should be included in the model after the introduction of factors хj.
Thus, the created regression model can be used to forecast the amount of venture capital investment during changes in fiscal policy factors and reduction of macroeconomic risks.
We consider that the hypothesis of the determining influence of fiscal factors of stimulating research and development and a set of stable economic and political preconditions on the expansion of the presence of venture capital in the country is proved. This allows us to form directions for intensifying venture financing for countries: ▪ for the development of high technologies and the implementation of innovative ideas, the state should apply tax benefits and preferences for research activities of small and medium enterprises. Taking into account the lack of direct and rapid economic effect from research (compared with industrial or commercial enterprises), the tax load hinders the development of research, limiting venture capital investment; ▪ expansion requires state support for innovation through the consolidation of state and local budgets on research programs, the creation of research and production clusters, technology incubators, support for natural persons in their innovation initiatives; ▪ the high risk of the country not only leads to a decrease in the inflow of foreign venture capital: domestic investors will withdraw their venture capital and direct it to countries where the political and economic situation is more stable, which further deepens the economic shocks of the national economy and leads to political ones. Accordingly, the government should seek to resolve political conflicts or overcome political instability, provide a high-quality legal framework for business, reduce corruption, and lay the grounds for macroeconomic stability [14; 15].
It is believed that the implementation of a set of these measures will promote the development of high-tech enterprises, and job creation in the country by coming to the problem of limited financial resources through the investment of venture capital.

CONCLUSIONS
Based on the data of twenty European countries for 2007-2019 (260 observation points), a regression dependence of the amount of invested venture capital on tax preferences in research and development, research and development costs and country risk has been created. The assessment of the parameters of the created regression model made it possible to prove that it can be used for forecasting the amounts of investment of venture capital at the change of factors of fiscal policy and reduction of macroeconomic risks.
On the basis of the conducted econometric analysis, the directions of practical realization of its results have been established. They consist in proving the hypothesis of the determining influence of fiscal factors of stimulating the research and development and a set of stable economic and political preconditions on the expansion of the presence of venture capital in the country. The directions of activation of venture financing for the countries have been formed.
The prospect of further research is to identify institutional factors that hinder the development of venture funds in countries.