Venture financing of marketing policy of small trade business in Ukraine

Economic Annals-ХХI: Volume 138, Issue 1-2(2), Pages: 52-55

Citation information:
Kraus, K. (2014). Venture financing of marketing policy of small trade business in Ukraine. Economic Annals-XXI, 1-2(2), 52-55. https://ea21journal.world/index.php/ea-v138-13/

Kateryna Kraus
Lecturer,
Poltava University of Economics and Trade
3 Koval St., Poltava, 36014, Ukraine
krauskatya@mail.ru

Venture financing of marketing policy of small trade business in Ukraine

Abstract. Introduction. With the development of market economy in Ukraine, a mandatory attribute of the marketing orientation of small trade business is innovation. This is because to survive in the market it needs continuously to support the changes, to update methods, ideas and approaches. Under such circumstances, the important is the using by small trade business the principles of innovation marketing and unconventional forms of financing, including venture.

Purpose. The main purpose of the article is summarizing the characteristics and prospects of development of venture business in Ukraine and substantiating the expediency of the venture financing of marketing policy of small trade business.

Results. Venture financing is an investment in the form of loans or investments in shares, which are being made by venture funds to create and to develop small companies, that have the potential for rapid development. Venture financing is characterized by flexibility, rapid approbation and commercialization of ideas, a small device management, adaptability to consumer demand, low cost.

Venture capital can be formed at the expense of the formal and informal sectors. The formal sector includes venture capital funds that pool resources of different investors (private and public pension funds, charitable funds, insurance companies and private individuals), special units and subsidiaries of commercial banks, non-financial and industrial corporations. The informal sector covers: personal savings of the entrepreneur, funds of relatives and friends, private funds available in debt, grants, funds of sponsors, business-incubators and «business-angels».

«Business-angels» are individual investors that are willing to invest their own money in business projects at sowing stage. Their involvement in financing of marketing activity of small trade business in Ukraine will make it possible to obtain: good relationship in the business community, experience of business management, the ability and desire to take risks, providing additional loan guarantees.

There are two groups of «business-angels» – passive and active. The former include investors, that made the investments don’t interfere in the activities of business entities, they are only interested in the possible return of their funds. Representatives of the active group are actively collaborating with the business entities, helping them turn into thriving enterprises.

Conclusions. Formation of venture capital industry in Ukraine is highly important, as it can significantly improve the trading activities of small business entities, that will increase the competitiveness of the national economy in the world.

Keywords: Innovative Marketing; Venture Financing; Small Business; «Business-Angel»

JEL Classification: G24; L81; M31

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Received 02.11.2013