THEORETICAL ASPECTS IN THE FORMATION OF
PEDAGOGICAL SCIENCES
International scientific-online conference
46
VENTURE CAPITAL FUNDING STARTUP PROJECT
AND DETAILS OF ITS USE
Meliziyayev Islambek
master’s student of the “Higher School of Business and
Entrepreneurship” under the cabinet of ministers
https://doi.org/10.5281/zenodo.14619328
Annotation:
The topic about the world experiences of financing startups is
very broad and specific. Different countries and economic systems employ
different methods of financing startups, but a common goal for all systems is to
develop new businesses and market them successfully. There are several basic
methods of financing startups globally and they vary depending on the economic
environment, financial infrastructure, government policies and market
conditions.
Keywords:
Venture Capital, global Experiences, Silicon Valley, Horizon 2020,
Kickstarter, government grants, strategic collaboration.
Venture capital is one of the most common methods of financing startups
with high risk and high revenue potential. VC funds invest large amounts of
capital in startups and are able to return their investments at a high level. They
usually invest in innovative ideas, technological startups or companies with
growth potential. America has one of the most developed systems of the venture
capital market in the United States. Silicon Valley is particularly known as a
global hub for venture capital. There are many large venture capital firms in the
United States to fund startups, such as Sequoia Capital, Andreessen Horowitz,
Accel Partners. These firms select startups, help them develop and invest their
own investments, taking a high risk.
In Europe, the venture capital market is growing, although smaller than in
the United States. Countries such as the United Kingdom, Germany, France and
Switzerland are strong centers of venture capital. Investors in Europe generally
prefer to invest in startups focused on sustainable and long-term growth.
Countries such as China and India are also characterized by growth in
venture capital. Startups are developing in China, especially in the areas of
technology and the internet. In India, however, there are major venture capital
investors such as Sequoia Capital India, Tiger Global Management, etc.
Return Venture capital investors often return their investment through an
IPO (Initial Public Offering, i.e., a public offering) or by selling the startup to
another large company. This allows investors to generate high returns. The
Venture capital funds System Works in many countries through systems created
THEORETICAL ASPECTS IN THE FORMATION OF
PEDAGOGICAL SCIENCES
International scientific-online conference
47
by the government or the private sector when venture capital funds support
startups. For example, in Europe, the Horizon 2020 program provides grants
and loans allocated to support startups.
Angel investors are rich and experienced investors who invest their
personal funds in novice entrepreneurs. They usually provide financial support
at the initial stage of the startup and take a high risk when investing.
In the US, angel has many networks and platforms for investors. Angelist is
one of the most popular online platforms, connecting startups and angel
investors. This platform allows startups to connect directly with investors.
Crowdfunding is highly developed in the US. Through platforms such as
Kickstarter, Indiegogo and GoFundMe, startups attract many small investors.
Kickstarter and Indiegogo are among the most popular platforms for initial
financing, providing the greatest opportunities for startups.
In Europe, the angel investor network is growing, but is still in development
when compared to the United States. In the United Kingdom, there are
organisations such as the UK Business Angel Association (UKBAA), which angel
assists in consolidating investors and funding startups.
Community funding Angel investors often explore fundraising
opportunities for startups on crowdfunding platforms. Through platforms such
as Kickstarter, Indiegogo, investors can make small investments in many
startups. Crowdfunding is a new and popular way to raise funds for startups. In
this way, startups or projects raise funds from small investors through online
platforms. Crowdfunding primarily involves four types of funding: gifts, debts,
promotions, and philanthropy.
The crowdfunding system is growing in European and Asian countries.
Stock-based crowdfunding platforms such as Seedrs and Crowdcube are popular
in the UK. In China, the. JD.com and crowdfunding systems are actively working
on platforms like Taobao. On platforms like Kickstarter, startups make it
possible to buy their products in advance. Through this, they not only raise
funds, but also determine the demand for the product in the market.
Crowdfunding allows startups to attract many small investors. This helps to
reduce the economic risk for startups, since they are not limited to only one
investor or investor in their start-up.
Incubators and accelerators are organizations that provide education,
resources, and financial support for startups. They help beginners in business
development and provide mentoring, networking opportunities for them. There
are hundreds of incubators and accelerators in the US, such as Combinator,
THEORETICAL ASPECTS IN THE FORMATION OF
PEDAGOGICAL SCIENCES
International scientific-online conference
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Techstars, 500 Startups. These organizations provide step-by-step support for
startups, including seed funding, mentoring, team building, and leading to
investors.
There are also many incubators and accelerators in Europe. High-quality
startup incubators operate in cities such as London, Berlin, Paris and
Amsterdam. For example, Seedcamp and Station F are one of the largest startup
incubators in Europe. Incubators and accelerators help startups get the
necessary knowledge and experience not only for financing, but also for
business development. They organize trainings, seminars and workshops for
startups.
Of course, we will continue about the world experiences of financing
startups and bring additional details. In financing startups, the economic
conditions, legislation and stages of development of each country dictate specific
approaches. Therefore, the methods and experiences of financing startups can
vary from country to country. The following is an overview of several other
global startup financing experiments and solutions made through them.
Governments are often interested in developing innovative startups and
provide various grants, subsidies and loans for them. Public funding is a low-risk
resource in startup financing, providing startups with the necessary funding in
the early stages. The European Union (EU) is very active in supporting startups.
The Horizon 2020 program, founded by YI, is designed to fund scientific and
technological research and innovation and focuses heavily on startup
development. Through this program, startups can pursue their projects through
grants and loans.
In the United States, Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs are provided by the
government to support SMEs. These programs fund startups in science and
technology development and innovation.
There are many government-sponsored grants and startup development
programs in China. The government provides tax breaks, grants and other
economic relief to encourage startups. For example, cities such as Beijing and
Shenzhen organize “technology parks” for startups to provide funding from the
state.
Government grants often provide non-refundable funds, reducing risk for
starups. But, some grants and subsidies may impose restrictions on such
startups, such as the obligation to offer a product or service in a particular
market or to expand innovation internationally.
THEORETICAL ASPECTS IN THE FORMATION OF
PEDAGOGICAL SCIENCES
International scientific-online conference
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Through government programs, startups often have the resources they
need to bring their innovative ideas into practice, such as technology labs,
marketing development, and the funds needed to obtain patents.
Many large companies want to collaborate with and fund startups because
it is beneficial to integrate new technologies and innovations into their
businesses. Corporate venture capital (CVC) is funds allocated by large
corporations to fund startups.
In the US, the corporate venture capital system is highly developed. For
example, tech giants like Google, Microsoft, Intel fund startups with the aim of
expanding their innovative activities. Google Ventures and Intel Capital are some
of the most notable examples of corporate venture capital. Japan, known for its
advanced technology sector, is highly engaged in startup financing through
corporate venture capital. For example, large companies such as Rakuten and
SoftBank have created their own investment funds to support startups.
The benefit of corporate venture capital is that startups not only receive
financial support, but also have the opportunity to establish strategic
partnerships with large companies. This, in turn, speeds up the startup's entry
into the market and allows it to distribute its products to a wide audience.
Through corporate venture capital, startups often become familiar with the
changing and advanced technologies of large corporations. These large
companies develop an innovative ecosystem theme by providing technological
support, expertise and networking for startups.
Private equity () is an investment method that makes its investments in
startups or growing companies. Private equity funds usually invest in companies
that are developing and have achieved a stable income. In the United States,
Private Equity Funds play a very large role in the development of small and
medium-sized businesses.
These funds ensure that companies grow by buying, consolidating, or
investing capital in them. Approaches to private equity in Europe and Asia are
primarily concerned with companies that have reached sustainable growth
stages. Private equity investors often increase their income by buying companies
with a competitive market or investing capital in them.
Private equity investors help strengthen their positions in the market by
buying startups or growing companies. This creates growth opportunities for
startups and provides them with advanced technology and management
experience.
THEORETICAL ASPECTS IN THE FORMATION OF
PEDAGOGICAL SCIENCES
International scientific-online conference
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Private equity funds often focus their investments only on companies with
highly developed and stable returns. These can be high requirements for
startups when it comes to attracting investment.
Financing startups using cryptocurrencies and blockchain Technologies has
led to major changes in recent years. New financing methods, such as ICO (Initial
Coin Offering) and STO (Security Token Offering), have enabled startups to raise
funds through cryptocurrencies.
In the US and European countries, startups through ICO and STO systems
attract investment by issuing new tokens or cryptocurrencies.
In 2017-2018, ICOs became popular and became one of the innovative
sources of funding for startups. The development of blockchain technology in
China continues, but there are some restrictions on the part of the government.
However, in countries such as South Korea and Singapore, financing through
blockchain and cryptocurrencies is developing very actively.
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2."Finance" - T.Malikov, O.Olimzhonov,. Tashkent “economy-finance” 2019
3."Organization and financing of investments" - R.X.Karlibayeva,. Tashkent –
2011
4.Lex.uz
5. International Scientific Journal No. 17(100), Part 1 “Education News: Research
in the 21st Century” January, 2024
