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13 Oct, 2010 08:29

Silicon visitors push private for Skolkovo

America's Silicon Valley founders suggest “taking government out” and letting Russian startups grow through private money, but some also note that Russian factors lead to more government involvement.

The investors who built California’s Silicon Valley have come to help Russia create its own. But they’re worried its state driven, led by President Dmitry Medvedev, with Danny Wallace, a Silicon Valley partner from PriceWaterhouseCoopers, saying excessive government involvement could put investors off.

“The whole idea about venture capital is you take government out of the equation, and you leave it up to the entrepreneur. So that’s definitely something that will be front and centre of their minds when making investment decisions.”

However, Anatoly Chubais, Director General at Russian Technology Corporation, warns Russia is different.

“We have a very special situation where you can’t introduce innovation by decree, but at the same time in Russia you cannot introduce them without the decree. So that’s the kind of the Russian mystery.”

Both ways can work. Ivan Nachaev, Executive Director at Autotracker, says state funds helped start AutoTracker, top maker of fleet management software known as telematics. In August, Russia’s first venture Initial Public Offering took it private, making the young founders very rich indeed.

“We started as a group of students inspired by the idea that telematics will rule the world.
VTB and the Russian Venture Company, which believed our idea, gave us money to go national. And in 2010 we started thinking worldwide, we understood there are a lot of emerging markets where our products are very competitive, and we made an IPO just for going abroad.”

The state will fund at least half the $6 billion cost of Russia’s Silicon Valley, currently under construction in Skolkovo near Moscow. But there are signs the Californian delegation is starting to influence. On Monday, Skolkovo chief Victor Vekselberg admitted “this project will only be successful if hundreds of independent companies join.”