Russian Energy Innovators Seek Angel Investors

By Bojan Soc, April 19, 2014

example, a clause in the applicant company’s Articles of Association stipulating that it’s strictly involved in research activity. If some other types of activity are listed there, such as trade, for instance, the applicant must set up a new company or amend the current Articles of Association accordingly. 

OGE: What benefits does the participant status bring?

Pertsovsky: Unique tax benefits and access to all supplementary services offered by the Skolkovo Foundation and Skolkovo Technology Park that are related to various support instruments. There is a separate system of grants, for which participant companies can apply. 

OGE: What’s unique about the tax benefits you mentioned?

Pertsovsky: It's 0 percent profit tax, 0 percent property tax, VAT exemption, and probably the most important benefit for research companies are the benefits on contributions to social funds, which, according to Russian legislation, are calculated on the basis of salary fund. Instead of 30 percent, our participants pay 14 percent to these funds. At early stages of research R&D companies usually have no profit or it’s minimal, that is why these social contributions benefits, probably, matter most to them since a researcher’s salary is the main cost item for these businesses. Additionally, Skolkovo participants are entitled to reimbursement of custom duty payments made when importing research equipment. This set of benefits is the same for all Skolkovo participants.

OGE: How is the project funding regulated?

Pertsovsky: We don’t fund all of participants’ projects. The criteria here are much stricter, especially in regard to potential commercialization of projects screened by external experts. When we talk about awarding grants, it is essential that the participant clearly understands who his potential customers and counterparts are. As a rule, grant-seeking participants submit certain agreements of intent or letters of interest from their potential consumers. This is important since we award grants to the companies that have recognizable long-term commercial potential. Grant financing never provides 100 percent of required funds, we always require co-financing, which in our cluster accounts for approximately 50 percent on average.

OGE: Who acts as a co-investor most often?

Pertsovsky: It differs. Some companies approach us with a co-investor, and for some others we help find one ourselves. There can be various kinds of co-investors: energy sector firms, portfolio investors or venture funds accredited by Skolkovo. There is also a separate, but not less significant group of financiers – angel investors. We have started to develop this initiative by setting up an angel investors’ club at Skolkovo, as venture funds aren’t ready to step in at early project stages despite rather small amounts of required investments that usually range from $100,000 to $300,000. In these cases involvement of angel investors is really essential. Sometimes they play the role of mentors and help project developers understand the way market works and the methods of entry. That is why we intend to develop the mentoring initiative, and our first step will involve the mentors from the Houston Technology Center (HTC).