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New Government fund for internet startups goes online

0 3 July 2013

Russia new "Internet Initiative Development Fund" has launched its website, 7 months after the idea was first floated by President Vladimir Putin

Originally the fund, which is overseen by the Centre for Strategic Initiatives (ASI), was to be targeted at socially-oriented Internet projects. It was hoped that the fund would help to address social issues and create jobs for Russia’s creative class. 

However, the stipulation that projects should have a social impact seems to have been dropped, as there is no mention of it on the new site. Instead, the fund welcomes applications from any internet entrepreneurs with a good idea, but a lack of funding or experience. 

As is often the case, the Russian government is well aware of the problem - early stage projects in Russia find it very difficult to attract investment. This not only leaves them financially disadvantaged - it means that they also miss out on the advice and support that experienced investors can offer. 

In light of this, the new fund not only offers financial support to early stage internet projects. It is also planning a range of educational programmes and legislative initiatives to support startups. In order to encourage more investors to commit to early stage projects, it will also try to facilitate co-investment and co-financing agreements.

While some will welcome the additional funding and services offered by the new fund, others question whether state agencies are really best placed to make investment decisions. Esther Dyson, an American entrepreneur with 20 years' experience of Russian business, reckons that the government would be better off focussing on being a demanding customer.

With applications not opening until the end of the summer, we will have to wait and see whether this project can really boost innovation on the Russian internet.

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