Several words about the methods of the attraction of investments. V.O. Music (www.nfk.ru)

Two fundamental methods of the attraction of the investments

There are two fundamental methods of the attraction of the investments: investment into regulation capital of company and debt financing. In the first case the investor, in exchange for the allowed investments, acquires portion in regulation capital of company, i.e., he becomes the shareholder of company, while in the second case the assignment of means takes shape in the form of debts and investor becomes the creditor of company.

Besides these it is specific the attraction of investments there exist also, the so-called, kombinirovannye forms of the attraction of the investments, which under specific conditions can pass of one category to another, for example: the convertible bonds or bank credit under the guarantee of the actions of company.

It is accepted to divide investments into regulation capital according to the types of investors into the financial and the strategic.
Financial investors

Financial investors, as a rule, do not strive for the acquisition control block of shares of company, they are interested in preserving of the existing management of company and their interest in the project it bears exceptionally financial nature, i.e., they expect to obtain the greatest profit from the project with the assigned level of risk. Control over the activity of company, besides the legally acquired rights of the property of investor on the action, is also achieved by participation in the council of the directors of the company of the representative of investor. Financial investor determines for himself the horizon of investment, usually this 4-6 years, on reaching of which he leaves from the project, selling its portion either to the existing shareholders or to the third persons. Inside the horizon of investment the investor, as a rule, is not interested in the extraction of profit from the company and expects to obtain entire profit from his participation in the project at the stage of output from it. For this very reason for the financial investor so it is important even at the stage of the examination of project to think over strategy of output from it, and for the company of recipient to propose the most acceptable versions for the investor.

Thus, from the point of view of the company of recipient financial investor is characterized, first of all: by the retention of the acting structure of control by company, with the intermediate-term period of investment and by the interest in the maximization of the cost of company.
Financial investors in Russia are first of all the western funds for the venture investments, largest of which are formed with the participation of the European bank of reconstruction and development (YEBRR). In Russia at present act several regional venture funds for those formed with the participation YEBRR. The work of these funds is characterized by the thorough selection of the object of investments and by the tendency not to so much maximize the profitableness of investments, to as minimize the risks, inherent in such investments. Therefore funds prefer to work with the companies, which already passed the initial stage of formation. Besides the funds YEBRR in Russia are represented other western financial institutes, such as ING Group or AIG Brunswick. The work of the funds of these institutes is characterized by larger effectiveness in decision making in comparison with the funds YEBRR, although it requires not less thorough training of company- recipient for the investments.

Recently became noticeable the new tendency of the substitution of western investment capital by domestic investments. As an example of this substitution of western capital by Russian can serve sale YEBRR of the actions of an enterprise IN JOINT STOCK COMPANY "new era" in the company "Baltic financial agency", the daughterly structure "Industrial- construction bank". As a whole to the process of this substitution unconditionally contributes macroeconomic situation in the country, and also the special feature of venture business. Basic investments were made funds in the period from 1994 through 1997, and the task of output from the projects now arises before the funds. Output to the Russian fund market in view of the low liquidity will not bring the desired return from the investments, but public arrangements on the western exchanges are practically impossible. Remains opposite sale of actions to the management of company, or sale to company to strategic partner.
Strategic investors

For the strategic investor, in contrast to the financial, by the basic factor, which influences the value of project, is not profitableness, but obtaining of additional benefits for their basic form of activity from the collaboration with the company recipient. Therefore strategic investor into the company, in essence, become enterprises from the adjacent branches. In this case the investor, although to it is more right call his partner, requires significant representation in the council of the directors of company and actively participates in control of the latter. In turn company- recipient can obtain additional benefits from this collaboration not only in the form of cash resources, but also in the form of the guaranteed deliveries, sale, qualified personnel and qualitative control, know-how, logistic chains, etc. strategic partner, as a rule, he is not limited to the specific periods of participation in the project. Furthermore, there is even a Russian specific character of the attraction of the strategic partner, who, as a rule, is interested in obtaining by 100% of portion of participation in the business.

Small and average Russian business is characterized by the fact that often the owner and the manager of company is one and the same person. And if as the manager of company, he understands the need for the attraction of investments for retaining the rates of the development of business, or retention of the conquered market share, then, as owner, he does not desire attraction into his business of the third persons, fearing, that he can lose entire business wholly after a certain time. The unwillingness anything to undertake frequently concludes with the loss of market share, to a reduction in the cost of company, also, in the final analysis by bankruptcy. The attraction of financial partner can be output in this situation, in this case manager one should remember about the fact that the skill to select honest partner must be one of his strong sides, but to owner not to forget about the fact that the partner will attempt to increase the cost of their general business, but, therefore, and the welfare of owner. 
Debt financing

Debt financing has a set of forms and most frequently utilized these are - the long credits and the obligatsionnye loans. Unfortunately, the lack of development of the infrastructure of market of securities does not make possible for average companies to leave for the market for the obligatsionnykh loans, yes even the economic conditions of such loans will be hardly advantageous for the company. So that the company could draw means on the advantageous for itself conditions on the external market it it must accomplish significant work on internal reorganization and disclosure of information for the market.

Long-term crediting it would be possible to name the less expensive method of financing, from the point of view of the abstraction of intra-firm resources and possibility of reference to the prime cost of percent payments. However, Russian banks do not attempt to give credit new business, but for the long-term crediting of the acting business they do not have not free means, not desire, since for the bank to considerably more simply finance short term commercial operations and to ensure to itself the necessary rate of profit. Furthermore, banks with the crediting advance a number of the additional conditions, such as the transfer of revolutions into the bank creditor, that always cannot be convenient to company, or the assignment of the personal guarantees of the recovery of credit the owners of company.

Among other things there is one additional factor, which must consider manager with making of a decision about the method of the attraction of investments - this is the risk of the nonfulfillment of its obligations before the investors. If debt financing was drawn, then the nonfulfillment of obligations regarding the payment of percentages entails the realization of guarantee, and is possible also the excitation of the procedure of bankruptcy. Investor, who put means into regulation capital of company undoubtedly more loyally relates to her own company, which, however, in no way will be reflected in the opinion of investor about the results of the activity of the manager of company. Thus, in practice in average and small business there are not too and many methods of the attraction of investments, in spite of entire the variety of forms it is specific these methods.