Venture Capital: Early-stage startups with high growth potential
VC offers the highest asymmetric returns in alternatives assets but with extreme risk, illiquidity, and zero margin for error
Global Trends (Venture Capital)
Growth (2020–2024):
Collapse of Ecosystem:
Pre-2022: #2 tech hub; strong in AI, gaming, biotech.
Post-2022 Reality:
Conclusion
Venture Capital offers the highest asymmetric returns in alternatives but with extreme risk, illiquidity, and zero margin for error. In Russia, it survives only through state-subsidized "survival investing" – targeting sanctioned industries with trapped capital.
We are still thinking that there is a space in every investor portfolio for a risky asset category like Venture Capital, supporting local business and startups should improve the quality of products and increase readyness for future profitable projects.
Growth (2020–2024):
- 2021 Frenzy: Record funding ($683B global), mega-rounds, and unicorn creation. Early-stage median deal size ↑40% YoY.
- 2023–2024 Correction: Funding ↓35% YoY (2023-24). Investor focus shifted to profitability, unit economics, and AI/DeepTech. Seed stage remained resilient (-15% vs. -50% for late-stage).
- Sector Shifts: AI, climate tech, and biotech dominate; crypto/web3 cooled.
- Key Risks: High mortality rate (60–90% failure), valuation resets, exit drought (IPOs ↓80% since 2021).
Collapse of Ecosystem:
- Foreign VCs fully exited; sanctions froze follow-on funding.
- Domestic funds (Russian Ventures) now dominate, backed by state banks and wealthy individuals.
- Focus on "critical" tech: cybersecurity, drone tech, import-substitution SaaS, agritech.
- Deal flow ↓85%+ since 2021; early-stage valuations down 50–70%.
- Challenges: Brain drain (100k+ tech workers left), SWIFT restrictions, zero M&A/IPOs.
Pre-2022: #2 tech hub; strong in AI, gaming, biotech.
Post-2022 Reality:
- Talent exodus crippled innovation; defense tech now prioritized.
- State grants replace VC. Surviving startups serve domestic needs or just die.
- Outlook: Local early-stage VC is functionally dead without state subsidies.
Attribute | Venture Capital | vs. Private Equity | vs. Real Estate | vs. Commodities |
Return Potential | Extreme (top funds: 25–35% IRR) | High (15–25% IRR) | Moderate (6–12% IRR) | Speculative |
Liquidity | Lowest (7–12 yr horizon) | Very Low (5–10 yr) | Illiquid | High (futures) |
Failure Rate | Highest (>60% early-stage fail) | Moderate (10–20% loss) | Low (collateral value) | Low (physical storage) |
Income | None (illiquid until exit) | None | Stable yield | None |
Control | Moderate (board seats, milestones) | High (control positions) | Limited | None |
Risk Drivers | Product-market fit, execution, dilution | Leverage, exit timing | Interest rates, location | Macro, geopolitics |
Barriers to Entry | High (network access, expertise) | High (large capital) | Moderate | Low |
Inflation Hedge | Weak (tech valuations suffer) | Weak | Strong | Strong |
Conclusion
Venture Capital offers the highest asymmetric returns in alternatives but with extreme risk, illiquidity, and zero margin for error. In Russia, it survives only through state-subsidized "survival investing" – targeting sanctioned industries with trapped capital.
We are still thinking that there is a space in every investor portfolio for a risky asset category like Venture Capital, supporting local business and startups should improve the quality of products and increase readyness for future profitable projects.
This is venture capital reshaped: less about hyper-growth, more about strategic resilience. Less about global exits, more about national impact.
Build a Resilient Tech Future — Together
Build a Resilient Tech Future — Together
Contacts
Tel: +79052255567
email: info@dma-invest.com
Address: St. Petersburg, 191123, Zakharyevskaya st., 25 letter A, premises. 21-n, office 508
email: info@dma-invest.com
Address: St. Petersburg, 191123, Zakharyevskaya st., 25 letter A, premises. 21-n, office 508
About the company
Services
Contacts
OOO "DMA INVEST"
St. Petersburg, 191123, Zakharyevskaya st., 25 letter A, premises. 21-n, office 508
Russian Federation
Tel: +79052255567
email: info@dma-invest.com
St. Petersburg, 191123, Zakharyevskaya st., 25 letter A, premises. 21-n, office 508
Russian Federation
Tel: +79052255567
email: info@dma-invest.com